City Council Subcommittee
March 17, 2026

Visitacion Garden RFP Page 1 of 4

HOUSING SUBCOMMITTEE AGENDA REPORT
Meeting Date: March 17, 2026
From: Julia Ayres, Acting Community Development Director Subject: Presentation of Revised Proposal from HEART Responding to RFP for Ownership and Management of Visitacion Garden Senior Housing Recommendation
That the subcommittee (a) receive and discuss the presentation regarding HEART’s updated proposal for ownership and management of Visitacion Garden senior apartments, (representatives of HEART will be at the meeting), (b) meet in closed session to discuss terms of the proposal, and (c) provide direction concerning the Housing Authority’s negotiations with HEART, with the goal to provide to the full Authority Board in the next month or two a new ground lease and related documents with HEART.

Background
This subcommittee met on December 15, 2025 to review a proposal from the Housing Endowment and Regional Trust of San Mateo County (HEART) for a new 55 year ground lease and management agreement for Visitacion Garden senior apartments. The December 15, 2025 subcommittee report (see Attachment 1) provides a detailed background on the history of the property, current ground lease with Brisbane Senior Housing, Inc. (BRIDGE Housing), as well as HEART’s proposal as originally submitted. At that meeting the subcommittee authorized the City Manager/Executive Director (the Housing Authority owns the property) to negotiate with HEART terms of a new ground lease based on its proposal. HEART’s due diligence period started immediately.

While HEART’s due diligence was initially forecast to conclude within 45 days, extensions were required because of the onset of the holiday season, the completion of the Phase 1 Environmental Assessment, property value appraisal, and updated capital needs assessment required additional time. Due diligence concluded on February 24, 2026 and HEART submitted an updated proposal to staff based on those completed assessments (see Attachment 2). The updated proposal is described below.

Discussion
HEART’s updated proposal is driven by two primary factors:
- The completed appraisal (see Attachment 3) found the current value of the property to be less than the outstanding debt (including principal and accrued interest). - The updated capital needs assessment (see Attachment 4) found additional capital costs beyond BRIDGE’s assessment.

Visitacion Garden RFP Page 2 of 4
The revised salient terms of the proposal are as follows:
o Acquisition price and outstanding debt:
▪ Original Proposal: HEART’s original proposal set forth the “acquisition price” of the improvements on the property as the total outstanding debt on the property, including all outstanding principal and accrued interest from both the Authority and the County loans, (about $4.267million) which would include two new City/Authority loans that would accrue 3% interest over 30 and 40 year terms.
▪ Updated Proposal: Acquisition price has been reduced to the appraised value of $3,290,000. This would require restructuring of the existing Redevelopment Agency/Housing Authority loans and County loan such that the new restructured loans amount to the total appraised value.

Specifically, the City loans would be restructured to total $3,062,564 with 3% interest over a 55 year term (the same as the ground lease term) and would also include an additional principal amount to fund capital improvements (see below). The County loan would be restructured to $227,436; HEART has been in negotiations with the County concerning this restructuring.
▪ Impact: Currently, the total remaining principal and accrued interest of the two (former) Redevelopment Agency/Housing Authority loans totaled approximately $3.99 million. Of this total, about $1.66 million is accrued interest. If the loans were restructured to $3,062,564, that would leave $930,115 in accrued interest not captured by the new loan and either payable by BRIDGE or forgiven by the Authority. BRIDGE has requested that the Authority forgive any principal and accrued interest amount that exceeds HEART’s acquisition price (see letter in Attachment 5). o Authority loan for capital improvements:
▪ Original Proposal: HEART’s original proposal included a standalone $350,000 loan from the Housing Authority to fund outstanding repairs and future capital needs. This was based on BRIDGE’s Capital Needs Assessment from 2024 and a construction budget originally estimated by HEART of $303,000. This loan would have had 3% interest and would have been in the fourth lien position on the property behind the two Authority loans and County loan.
▪ Updated Proposal: HEART’s requested Authority loan principal has increased to $390,250, and this principal is now combined with the restructured debt loan into one consolidated loan with a 55 year term and 3% annual interest, holding first lien position on the property. This loan increase is based on increased capital costs found in the updated Capital Needs Assessment prepared by HEART (see Attachment 4) and HEART’s updated budget of $434,063, which captures years 1-5 of the new Capital Needs Assessment. The proposal also includes an increased amount of the HEART loan to help fund the same and other development related costs; Visitacion Garden RFP Page 3 of 4
this would not financially impact directly the Authority. It is noted that the proposed increase to the Authority loan of $42,250 is significantly less than the proposed increase to the HEART loan of $127,900. (Originally the proposed HEART loan was $262,350.)
▪ Impact: Funding this loan would increase immediate expenditures from the Authority’s low/moderate income housing asset fund by an additional $42,250 from the original proposal, plus associated increased interest over the 55 year term.
o Replacement Reserve
▪ Original Proposal: One time initial infusion, funded at closing, of $90,420 into a replacement reserve account.
▪ Updated Proposal: Increased initial infusion at closing to $100,000, as well as increased annual contribution to fund the reserves on an ongoing basis shown in the revised 30 year proforma.
▪ Impact: Because these reserve payments take precedence over residual receipt loan repayments to the Authority, overall the revised proposal would divert some of those residual receipt loan payments to the Authority compared to the original proposal. Given the revised overall loan amount proposed, in staff’s opinion this is a minor impact overall to residual receipt loan repayments compared to the impact of the proposed debt restructuring.
o Cashflow Distribution for Loan Repayment from Residual Receipts ▪ Original Proposal: As noted, HEART’s original proposal called for three City/Authority loans; the two existing loans and a new loan to fund needed capital improvements. HEART’s original 30-year proforma proposed distributing cashflow (or payments from operating revenue) that prioritized paying off the two HEART loans before the City/Authority over the 30 year projection. It projected $2.08 million in loan payments to the Authority over the 30 year projection.
▪ Updated Proposal: HEART’s updated proposal restructures the existing debt and consolidates it with additional capital funding into one new loan.

Accordingly, cashflow distribution is recalibrated in the updated proposal.

The two HEART loans are still prioritized, with cashflow primarily geared toward paying them both off by Year 13. Starting Year 14, the majority of cashflow will go toward paying off the Authority loan. The updated proforma projects $2.106 million in loan payments to the Authority over the 30 year projection, but due to debt restructuring the Authority isn’t necessarily receiving more revenue as a result.

Next Steps
Based on the subcommittee’s direction, which direction should be given in the closed session that will follow immediately the regular agenda, staff will complete its negotiations with HEART, with the goal of bringing forward to the full Housing Authority Board a draft ground lease. loan agreements, and Regulatory Agreement (as to the rents charged to the existing tenants) at a Visitacion Garden RFP Page 4 of 4
future meeting, likely at the second meeting April or first meeting May for final action. Prior to that, staff will meet in closed session with the Housing Authority Board to discuss the recommended proposal.

Fiscal Impact
Existing debt totals approximately $3.99 million, including remaining principal and accrued interest of the two Authority loans. Of this amount, approximately $2,336,087 represents outstanding principal (original principal $2.5 million), and approximately $1,636,431 represents accrued interest. HEART has proposed to restructure the existing debt to a total of $3,062,564.

This amount would be combined with the $390,250 loan to fund capital improvements into one consolidated new loan with a principal of $3,452,814 with a 55 year term and 3% interest, in first lien position on the property.

Restructuring the debt as proposed would result in approximately $930,115 in accrued interest not captured by the new loan and either payable by BRIDGE or forgiven. As noted, BRIDGE has requested that the Authority forgive any principal and accrued interest amount that exceeds HEART’s acquisition price (see letter in Attachment 5). There are adequate funds in the low and moderate income housing fund to fund the new loan request of $390,250, should that be determined by the Authority to be appropriate.

As residual receipts loans, loan payments would be paid out of surplus revenue/receipts. HEART’s submitted pro forma shows the distribution of anticipated cash flow toward the Authority loan, and shows that the restructured Authority loan would have an unpaid balance due at the end of 30 years, with $2.106 million in payments over that time period. Projections to the 55 year term were not provided so it is not clear if at the end of the 55 years whether the loan would be entirely repaid.

Attachments

1. December 15, 2025 Housing Subcommittee Report

2. Updated HEART Letter of Interest and 30-Year Pro Forma (February 2026)

3. Appraisal prepared by Bowery dated January 20, 2026

4. Capital Needs Assessment prepared by Association Reserves dated January 27, 2026

5. BRIDGE letter to the Housing Authority dated February 26, 2026 ___________________________________
Julia Ayres
Acting Community Development Director
___________________________________
Jeremy Dennis
City Manager/Brisbane Housing Authority Executive Director Julia Ayres
Visitacion Garden RFP Page 1 of 3

HOUSING SUBCOMMITTEE AGENDA REPORT
Meeting Date: December 15, 2025
From: John Swiecki, Community Development Director
Subject: Presentation of Proposal from HEART Responding to RFP for Ownership and Management of Visitacion Garden Senior Housing
Recommendation
That the subcommittee receive the presentation of HEART’s proposal for ownership and management of Visitacion Garden senior apartments and recommend that the City negotiate a new ground lease with HEART.

Background
The Visitacion Garden Senior housing development at 8 Visitacion Avenue contains 14 apartment units for low-income seniors (age 62+) and includes a senior recreation center (“Sunrise Room”).

The former Brisbane Redevelopment Agency (RDA) purchased the site in 1995 for $440,000. The RDA partnered with BRIDGE Housing, a non-profit affordable housing developer, to design, construct, and manage the affordable senior housing development. Construction was completed in November 1999. The RDA issued two loans to BRIDGE to fund the development of the property. The Brisbane Housing Authority was activated in 2011 through adoption of Resolution 2011-15. The Housing Authority is governed by a five-member Board of Commissioners, filled by the Brisbane City Council members. Following dissolution of the Brisbane Redevelopment Agency in 2012, the Housing Authority assumed control over the Low and Moderate Income Housing Funds previously held by the Redevelopment Agency.

Brisbane Housing Authority retains ownership of the land beneath the development while BRIDGE (under its subsidiary Brisbane Senior Housing, Inc.) owns the buildings and improvements and manages the facility under a 30-year ground lease (“lease”) that expires in 2028. Under the terms of the existing lease, ownership of the building and improvements on the site will revert to the Housing Authority in 2028 unless a new lease is executed or the existing lease is extended.

BRIDGE reached out to City staff in 2023 to discuss possible extension of the lease. Following discussions among City staff, BRIDGE, and this Subcommittee, it was the consensus that a preferred path forward wasto seek a new entity that would enter into the existing lease or, more likely, enter into a new lease, or a new entity that would manage and operate the facility.

Based on this direction, in July 2025, staff brought forward a draft Request for Proposal (RFP) to the full City Council in its capacity as the Housing Authority Board. Following authorization by the Council, the RFP was released in August 2025 (Attachment 1). One proposal was received from the Housing Endowment and Regional Trust of San Mateo County (HEART). The proposal was reviewed by staff as well as a review committee comprised of Douglas Frederick, HCD Housing 4 B.

ATTACHMENT 1
Visitacion Garden RFP Page 2 of 3
Program Manager of San Mateo County Department of Housing (which holds a loan on the property) and Leigh Macalino, Housing Management Analysist with the City of Redwood City.

After reviewing the proposal and interviewing HEART, the internal review committee unanimously found HEART’s proposal to be responsive to the RFP and recommended that the City enter into negotiations with HEART for a new lease.

Discussion
HEART was established in 2003 as a Joint Powers Authority (JPA) between the County and its jurisdictions to operate a capital trust fund to provide short- and medium-term loans for the acquisition, predevelopment, and rehabilitation of affordable multifamily projects. In 2023, HEART formed an affiliate JPA (HEART-SV) to hold title in real estate developments and in 2024 purchased its first, and to date only, rental property in Redwood City. Armando Sanchez, Executive Director, has an additional 15 years of experience in affordable housing development and management.

Key features of HEART’s proposal (Attachment 2) include the following:

OVERALL INTENT
- HEART proposes to enter into a new 55 year ground lease and management agreement for Visitacion Garden, assigning its interest to HEART-SV, an affiliate JPA.

DEBT
- HEART is willing to assume the existing debt on the property on the condition that an appraisal demonstrates that the leasehold interest and improvements have a value equal to or greater than the debt. If the valuation is less than the Debt, HEART requests a restructuring of the Debt. (See Fiscal Impact section below.) - To pay for all costs associated with assuming the Project, including pay for the immediate repairs, the capital reserve, and the operating reserve, HEART is proposing a combination of a new $350,000 City loan and a 15-year $262,350 HEART loan.

TENANT MANAGEMENT AND RENT RESTRICTIONS
- HEART will honor all existing leases and designated area median income (AMI) rent levels for tenants currently residing at the Project.
- Existing rent restrictions would be maintained with one modification: replacing two 40% AMI units with one 30% AMI unit and one 50% AMI unit to align rents with Housing and Community Development (HCD) published rent levels.
- HEART proposes using an off-site property management firm.

A full summary of relevant proposal elements can be found in HEART’s letter of intent and proposed approach in Attachment 1. HEART has also provided a pro forma to demonstrate their 5 B.

ATTACHMENT 1
Visitacion Garden RFP Page 3 of 3
anticipated revenues and expenditures together with proposed debt management. HEART will make a full presentation of their proposal at the meeting.

Next Steps
As outlined in the RFP, the subcommittee will make a formal recommendation to the full Council in its capacity as the Brisbane Housing Authority whether to engage in further negotiation with HEART for a new ground lease and the terms of that ground lease.

Fiscal Impact
HEART has proposed to assume the existing debt on the property. Practically this would entail executing new loan agreements for the three existing loans (two City, one County). The two new loan agreements would equate to the existing loan amount plus accrued interest as one new loan, which would itself accrue interest on a 30-year term. Should the City move forward to negotiate with HEART, HEART has requested an appraisal which will determine whether HEART requests restructuring of the existing debt on the property. HEART also proposes a new $350,000 City/Authority residual receipts loan at 3% interest to finance capital improvements and reserves on a 30 year term. There are adequate funds in the low and moderate income housing fund to fund the new loan request.

As residual receipts loans, loan payments would be paid out of surplus revenue/receipts. HEART’s submitted pro forma shows the distribution of anticipated cash flow toward all three City loans, and shows that all three loans would have unpaid balances due at the end of the 30 year term.

Staff anticipates that HEART would request entering into new loans for new terms at the end of the 30 year term to roll over the remaining loan balances.

Attachments

1. Request for Proposals for Leasehold Interest and/or Management of the Visitacion Garden Senior Apartments

2. HEART of San Mateo County proposal
___________________________________ ___________________________________ John Swiecki, Community Development Director Julia Ayres, Principal Planner ___________________________________
Jeremy Dennis
City Manager/Brisbane Housing Authority Executive Director 6 B.

ATTACHMENT 1
Please be aware that under the California Public Records Act, all documents submitted in response to this Requests for Proposals are considered part of the public record and will be made available to the public, upon request, following the application deadline.

City of Brisbane and Brisbane Housing Authority
Request for Proposals:

Leasehold Interest and/or Management of the
Visitacion Garden Senior Apartments
8 Visitacion Avenue/3 Inyo Street, Brisbane, CA 94005
August 26, 2025
ATTACHMENT 1
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ATTACHMENT 1

Contents

1. Introduction...........................................................................................................5 A. Income and Rent Limitations...............................................................................5 B. Original Project Financing ...................................................................................6 C. Schedule ...........................................................................................................7

2. Project Requirements .........................................................................................9

3. Evaluation and Selection Process..........................................................................11 A. Evaluation Criteria ............................................................................................11 B. Selection Process.............................................................................................13

4. Submission Requirements....................................................................................14

5. General Terms and Conditions ..............................................................................15 A. Disclaimers......................................................................................................16

6. Enclosures ..........................................................................................................17 Enclosure A – Insurance Requirements...........................................................................0 Enclosure B – Proposer Certifications .............................................................................3 Enclosure C County of San Mateo Promissory Note , Deed of Trust, and Declaration of Restrictive Covenants (1998)
Enclosure D Ground Lease by and Between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
Enclosure E First Amendment to the Ground Lease by and Between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
Enclosure F Ground Lease by and Between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998) Second Amendment to the Ground Lease by and Between the
Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (2000)
Enclosure G Loan and Regulatory Agreements by and between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
ATTACHMENT 1
8 B.

ATTACHMENT 1

Enclosure H Addendum to the Loan and Regulatory Agreement by and between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
Enclosure I Loan and Regulatory Agreements (Bond Proceeds) by and between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
Enclosure J Declaration of Restriction by Brisbane Senior Housing, Inc. (2000) Enclosure K 2022 Audited Financial Statement
Enclosure L 2023 Audited Financial Statement
Enclosure M 2024 Audited Financial Statement
Enclosure N 2025 Budget
Enclosure O Current Rent Roll
Enclosure P Capital Needs Assessment for Visitacion Gardens Apartments prepared by Integrated Property Analysis, Inc. (2024)
ATTACHMENT 1
9 B.

ATTACHMENT 1

The City of Brisbane (“City”) and the Brisbane Housing Authority (“Authority”)1 are pleased to issue this Request for Proposals (RFP) to Proposers with demonstrated experience to (a) assume an existing leasehold interest and manage 8 Visitacion Avenue/3 Inyo Street (“Visitacion Garden”)[“the Project”], or (b) enter into a management agreement for Project, or (c) to enter into a new ground lease and management agreement for the Project. Where the proposal is for management only, the Authority will continue to be the owner of the property.

Selection will be made from responsive proposals that will best serve the interests of the City, the Authority, and residents of Visitacion Garden based on a combination of cost, experience, and capacity to operate and manage the Project.

Please submit your proposal using the format specified in this RFP. PROPOSALS MUST BE RECEIVED BY Monday, September 29, 2025 by no later than 5 PM. Any proposal received after the specified time and date will not be considered. Proposals shall be submitted electronically by email to Principal Planner Julia Ayres via email to [email protected].

Note: An email will be sent to confirm receipt of the electronic proposal.

Questions regarding proposals should be directed to:

Julia Ayres, Principal Planner
(415) 508-2129
[email protected]
1 The property is owned by the Brisbane Housing Authority. The Brisbane City Council serves as the Brisbane Housing Authority. As a practical matter, City staff carries out the day-to-day oversight of the Project.

ATTACHMENT 1
10 B.

ATTACHMENT 1

1. Introduction
The Project is a 14-unit, income and rent-restricted apartment complex for seniors located at 8 Visitacion Avenue and 3 Inyo Street in Brisbane, CA. Construction began in 1998, and the building was occupied in early 2000. At the time of construction, the property was owned by the Redevelopment Agency of the City of Brisbane “RDA”). Bridge Housing Corporation (“BRIDGE”), a Bay Area based company, developed the site. Brisbane Senior Housing, Inc. (the “Current Owner”) currently operates the Project pursuant to a long-term ground lease with the RDA (‘Ground Lease”). When Redevelopment Agencies were dissolved statewide, the RDA transferred the property and its interest in the Ground Lease to the Brisbane Housing Authority (“Authority”). The Ground Lease terminates on January 26, 2028. The City of Brisbane (“City”), the RDA and the County of San Mateo are all lent money to develop the Project, which loans remain outstanding. In consultation with Brisbane Senior Housing, Inc., the City, and the Authority, are now seeking proposals for any of the following scenarios:
• Assignment and extension of the existing Ground Lease to a new lessee/operator and/or other modifications to the existing Ground Lease; or • Early termination of the existing Ground Lease and execution of a new Ground Lease with the Proposer; or
• Early termination of the existing Ground Lease and execution of a property management and operations agreement under which the Proposer will manage and operate the Project for the Authority.

The Proposer must assume, but may work with the City, the County, and the Authority to restructure the existing project debt.

Income and Rent Limitations
Under the existing Ground Lease, the maximum household incomes allowed for tenants in the Project are as follows:

Table 1: Visitacion Garden, Number of Units by Income Restriction Percent of Area Median Income (“AMI”) Bedrooms Number of Units 30% One 2
40% One 2
50% One 4
60% One 2
60% Two 2
80% One 2
ATTACHMENT 1
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ATTACHMENT 1

Notwithstanding the household income limits, the maximum rents, based on the percent of AMI, have been set by two recorded Declaration of Restrictions. While one of the onebedroom units may be rented to a household with an income up to 80% of AMI, the maximum rent allowed for that unit is 60% of AMI. The resulting maximum rent table is as follows:

Table 2: Visitacion Garden, Number of Units by Rent Restriction Percent of Area
Median Income
(“AMI”)
Rent Limit Source Bedrooms Number of Units
30% HCD/San Mateo
County
One 1
30% HUD Low HOME
Rents
One 1
40% HCD/San Mateo
County
One 2
50% HCD/San Mateo
County
One 4
60% HUD High HOME
Rents
One 4
60% HCD/San Mateo
County
Two 2
It is expected that existing income and rent limitations will remain the same for existing tenants and that the Proposer may propose new long-term income and rent limitations that would apply upon turnover of existing units. If the Proposer proposes new income and rent limitations, such rent limitations must be affordable to lower income households.

A. Original Project Financing
The Project was financed through a combination of RDA and County of San Mateo (“County”) funds. As with many affordable housing developments, these funds are to be paid back out of surplus cash flow. And as with many similar developments, cash flow for this Project has been insufficient to repay the loans. Over the life of the Project, some small payments have been made, but substantial interest has been accrued by the Project.

Initial debt on the Project was $2,675,000 (of which, $2,500,000 was lent by the former RDA). As of January 1, 2025, the Project owes the Authority (who assumed fee ownership of the property and the RDA loan) $3,937,189, and the County $292,352, for total outstanding debt of $4,229,541, or $302,110 per unit. See Table 3 for details.

ATTACHMENT 1
12 B.

ATTACHMENT 1

Proposals should include a proposal for restructuring this debt.

Table 3: Source of Funds/Outstanding Debt, as of June 30, 2025 Source of Funds Original Loan
Amount
Remaining
Loan Amount
Accrued
Interest
Total Outstanding
Debt
Redevelopment
Agency of the City of
Brisbane/Authority
Loan 1
$1,000,000 $899,873 $600,700 $1,500,573
Redevelopment
Agency of the City of
Brisbane/Authority
Loan 2
$1,500,000 $1,436,214 $1,000,402 $2,436,616
County of San
Mateo (HOME
funds)
$175,000 $175,000 $117,352 $292,352
Totals $2,675,000 $2,511,087 $1,718,454 $4,229,541
B. Schedule
The City and the Authority anticipate that the RFP process will take 60 to 90 days, after which time one entity will be recommended to the Authority for negotiation of an assignment and/or extension of the existing Ground Lease, a new ground lease and regulatory agreements, or an agreement to manage the Project. While the schedule stated in this RFP represents the preferred timetable, it shall not be considered binding upon the City or the Authority. In addition, the submission of a proposal in response to the RFP shall not be binding upon the City or the Authority nor construed as a contract with or commitment by the City or the Authority.

The schedule is as follows:

Table 4. RFP Schedule
Activity Date
RFP Released Monday, August 26, 2025
Site Visit and Proposers Conference Friday, September 12 Questions and Requests for Clarifications Due Monday, September 15, 2025 City staff Response to RFP Questions/Clarifications Monday, September 22, 2025 RFP Submittal Deadline Monday, September 29, 2025
Proposer Interviews and Due Diligence October 2025
Authority Subcommittee Review and
Recommendation
October 2025
Authority Action November 2025
ATTACHMENT 1
13 B.

ATTACHMENT 1

1. RFP Release: The RFP is made available online at the City of Brisbane’s website at https://www.brisbaneca.org/rfps and at the Community Development Department, Brisbane City Hall, 50 Park Place, Brisbane, CA 94005.

2. Site Visit and Proposer’s Conference: A site visit will be held at the site at 8 Visitacion Avenue on Friday, September 12, 2025 at 10 a.m. A proposer’s conference will immediately follow the site visit at Brisbane City Hall, Community Meeting Room, 50 Park Place on Friday, September 12, 2025 at 11 a.m. To submit a proposal, a representative from the Proposer’s team MUST be in attendance at both the site visit and the proposers’ conference.

3. Questions and Requests for Clarification. Proposers must submit any questions or requests for clarification on the RFP via email to City staff by 5 p.m. on Monday, September 12, 2025.

4. City staff Response to RFP Questions/Clarifications: City staff will respond to all timely questions and provide any clarifications online at https://www.brisbaneca.org/rfps.

5. RFP Submittal Deadline: The City/Authority must receive responses to the RFP on or before the deadline listed on page 1 of this RFP. It is the responsibility of the Proposer to ensure that the proposal is received by the City/Authority before the deadline and that the information provided in the proposal is complete. The omission of information may be deemed non-responsive and may subject the Proposer to disqualification.

Adherence to the RFP submission deadline will be based on the time the City/Authority receives each submission email from the Proposer.

6. Proposer Team Interviews: The selection committee is expected to evaluate the proposals and then, provided that one or more proposals are deemed sufficient, the selection committee will hold interviews with one or more Proposers.

7. Due Diligence: The City/Authority reserves the right to request additional documentation and/or written responses to confirm statements made during the interview, follow-up questions, supplemental interviews, or to make other fact-finding efforts as the City/Authority determines it is necessary to assess the most qualified Proposer.

8. Recommendation and Authority Vote: The selection committee shall make a recommendation to the Authority’s Executive Director and the City of Brisbane’s Housing Subcommittee, before making a recommendation to the full Authority. Upon the affirmative vote of the Authority, City staff will negotiate with the selected Proposer an assignment and/or an extension of the existing Ground Lease, a new ground lease, or an agreement for management of the Project The Proposer shall also assume the existing obligations of the Project and the existing lessee shall be fully released from obligations associated with the Project by the City, Authority, and the County of San ATTACHMENT 1
14 B.

ATTACHMENT 1

Mateo and any successful Proposer. The Proposer should be prepared to perform its own due diligence, lease the Project in its as-is condition (if a ground lease is contemplated in the proposal) and enter into modified loan documents. City staff will also work with the Proposer to negotiate modifications to the County debt. If those negotiations are successful, the selected scenario will be presented to the Authority for a final decision.

2. Project Requirements
The following requirements and underwriting guidelines apply to the Project, whether or not the Proposer is, as part of its proposal, seeking funding from the Authority.

Table 5. Visitacion Garden Preservation Requirements and Underwriting Guidelines Item Requirement
Organization Status The Proposer may be a for-profit organization, a nonprofit organization, local government
agency, joint powers agency, or a community
land trust.

Proposer Experience Any potential Proposer shall have for at least three years owned or through a lease or other
agreement operated at least one project similar
to what is proposed in terms of scope, size,
budget, financing structure, ability to obtain
financing, and schedule. Proposers may use
key principals to qualify for experience.

Proposals for property management whether
responding for just the management contract,
or as part of a lessee/management team, must
reflect that the Respondent has managed at
least two completed projects similar to the
existing Project in terms of scope, size, and
operating budget.

Regulatory Term and Lease 99 years
Income Limits See Table 1
Maximum Rents (Including Utility
Allowances)
See Table 2 and discussion under “Income and
Rent Limitations” on p. 5 of this RFP
City Monitoring Fee Except where not allowed by law (AB2430), $125/unit per year.

Construction Management Fee (if
applicable)
5% of total construction costs.

ATTACHMENT 1
15 B.

ATTACHMENT 1

Item Requirement
Replacement Reserves Replacement reserve funding covers the cost of all repairs needed for 15 years as described in a
Property Needs Assessment (PNA) prepared by
a qualified third-party consultant.

The reserve must include a 3% price escalator,
if not included in the PNA.

The reserve may be funded through an initial
reserve deposit when the existing lease is
extended, or a new lease is entered into or
through annual deposits from cash flows (or a
combination thereof). A minimum of $500 per
unit per year is required if the initial reserve
deposit does not cover 50% of the 15-year PNA
cost.

Capitalized Operating Reserves Minimum 3 months’ expenses, including: hard debt, monitoring fees, and replacement
reserves
Vacancy Loss Percentage Minimum of 5%
Debt Coverage Ratio 1.1 over the first two years and 1.2 over the next 13 years of cash flow or the remaining
loan term of any hard debt (whichever is
longer).

Asset management fee Lesser of $1,000/unit, or $25,000/year with a

3.5% escalator.

Subordination The Authority will subordinate its deed of trust to lenders with a greater investment (senior
lenders) and to private lenders that require it as
a condition of funding.

The city will not subordinate its regulatory
agreement to any deed of trust but will
consider subordinating its regulatory
agreement to a senior lender’s regulatory
agreement.

Insurance See Exhibit A.

Renovations Any renovations proposed must either address the repairs and upgrades outlined in the Capital
Needs Assessment or be justified by an
independent assessment paid for by the
Proposer.

ATTACHMENT 1
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ATTACHMENT 1

Item Requirement
Hard cost contingency At least 20% of hard costs, including general requirements, overhead, profit, and
contractor’s contingency
Soft cost contingency At least 10% of all costs except acquisition, hard costs, reserves, and construction
management fees
Contingency Funds Contingency funds shall first be used to cover construction cost over runs, and the remainder
shall be deposited into the replacement
reserve.

Relocation Displacement or permanent relocation of
existing tenants is not allowed. Temporary
relocation during renovation is allowed. All
relocation must follow local, state, and federal
relocation laws, and a relocation budget must
be part of the proposal.

Property Welfare Tax If applicable, the budget must clearly show that the property will be accessing the welfare
tax exemption.

If new Authority funds are requested, the following requirements also apply:

Authority Loan Terms
Item Terms
Loan Term 55 years
Interest 3% annual simple interest
Payments Payments made from residual receipts
Subsidy Limit $50,000/unit
Substantive changes to the requirements may only be made upon approval of the Authority.

3. Evaluation and Selection Process
A. Evaluation Criteria
The City/Authority will use a quality-based selection process, and the assignment/lease/agreement will be awarded to the Proposer whose proposal is determined as providing the best value in meeting the interests of the City, the Authority, and Project tenants. Proposals will be evaluated by City staff based on professional qualifications and relevant experience; the proposed financing solution; the project approach; and the proposal's quality.

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The City/Authority reserves the right to reject all proposals, refuse any or all proposal(s), to waive technicalities, and to accept whichever proposal that may be in the best interest of the City, the Authority and Project tenants, at the City’s/Authority’s sole discretion. City staff will evaluate all proposals deemed responsive and make a recommendation to the Authority based on the criteria below and the percentage of their importance.

1. Professional qualifications and relevant experience (30 percent) Proposers should meet the following capacity and experience requirements:
• Proposers who intend to have a leasehold interest (whether existing or new) and operate the Project must have owned or had a long term leasehold interest for at least three years in at least one project similar to the existing Project in terms of scope, size, budget, financing structure, ability to obtain financing, and schedule.

Proposers may use key principals to qualify for experience. • Proposers, whether responding for a management contract only, or as part of an owner/manager team, shall have managed at least two) completed projects similar to what is proposed in terms of scope, size, and operating budget.

Proposers must provide documentation relevant to capacity and experience including the following from similar projects: two years audited financial statements, the most recent annual budget, and any legal or funding agreements. Statements are not required from key principals if they no longer have access to these documents.

Additional weight will be granted to those Proposers who have similar experience with affordable senior housing projects and/or have the clear capacity to address the capital improvement needs of the Project as outlined in the 2024 Capital Needs Assessment prepared by Integrated Property Analysis, Inc.

2. Financing Solution (30 percent)
Recapitalization is necessary for the Project to meet long-term maintenance needs and financial sustainability. Proposals will receive points based on the Proposer’s ability to find creative solutions and reduce investment of scarce public resources while maximizing financial feasibility.

The Authority is open to providing funding for the Project, however Proposers will improve their score if they are able to minimize the expense to the Authority through viable plans to increase income to the Project and/or bringing alternative funding sources (e.g. county, state, private, or charitable funds) to the Project.

3. Approach to the Project (20 points)
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The proposal should reflect that Proposers have identified the special circumstances of the Project and have identified viable solutions to the Project’s needs. In addition, Proposers should provide a feasible timetable for repairs and upgrades to the Project, while minimizing relocation and other disruptions to tenants.

4. Quality of proposal (20 percent)
Points will be granted based on the information conveyed, the overall proposal quality and readability, and the technical expertise presented.

B. Selection Process
The Authority is the sole final decision maker regarding the selection, and it reserves the right to reject any or all proposals.

During the selection phase of the process, members of the City’s selection panel and/or consultants retained by the City will evaluate the proposals. At their discretion, they may contact references and industry sources, investigate previous projects and current commitments, interview some or all the project team members, and take any other information into account in their evaluation of the proposal. The City reserves the right to request clarification or additional information from Respondents and to request that Respondents make presentations to the Authority, community groups or others. Based on their evaluations, City staff will prepare a “short list” of Respondents who will then be interviewed by the selection panel.

The Authority may, with the selected Proposer, enter into an assignment and/or an extension of the existing Ground Lease, an operating/management agreement, or a new ground lease. Any such assignment/extension, agreement or ground lease must have provisions that the existing income and rent limitations applicable to existing tenants shall remain in place.

Minimum Threshold Requirements:

1. The proposal must be complete.

2. A principal member of the Proposer’s team must attend the site visit and proposers’ conference.

3. The Proposer must commit to maintaining direct and continuing control of the project throughout the regulatory period.

4. The funds requested must align with identified repair and construction needs, as outlined in the 2023 Property Needs Assessment, or through a new assessment, completed by the Proposer at its own cost. Requested funds may also cover the costs of construction management.

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4. Submission Requirements
Submit the proposal using the format specified in this Request for Proposals. PROPOSALS MUST BE RECEIVED BY Monday, September 29, 2025 by no later than 5 PM. Any proposal received after the specified time and date will not be considered. Proposals shall be submitted electronically to Principal Planner Julia Ayres at [email protected]. Note:

An email will be sent to confirm receipt of the electronic proposal.

Proposals must include the following, in the following order:

1. Cover letter with Proposer’s name, amount of funding requested (if any), and proposal summary (max 1 page).

2. A clear statement as to whether the Proposer is seeking an assignment and extension of the existing Ground Lease and to operate and manage the Project, a contract to operate and manage the Project, or a new Ground Lease by which the Proposer will operate and manage the Project.

3. Description of the Proposer’s approach to the Project, including a description of how the existing debts would be restructured or paid off and a summary of the sources and uses, including anticipated costs of repairs and renovation as established in the 2024 Capital Needs Assessment prepared by Integrated Property Analysis, Inc., Authority funding, and any additional funding sources anticipated or secured by the Proposer.

4. Description of the Proposer(s), including years of experience, types of projects, role in projects, and key principals with contact information (max 2 pages).

5. Organizational documents from the State, organizational chart, non-profit status (if applicable), and operating agreements for partnerships.

6. Last two years of audited financial statements of entities or principals. Small organizations that do not conduct audits may request a waiver but must submit two years of their financial statements (balance sheets and annual profit and loss statements), and two most recent years of their IRS Form 990.

7. Description of property management company, including years of experience and types of projects managed (max 2 pages).

8. Schedule listing proposed key dates including funding applications (if applicable), inspections, building permits (if applicable), and repairs and renovations.

9. Any property inspections completed by the Proposer.

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coverage ratios. Applicants should use the budget template provided by the City or provide the information in a spreadsheet (not a PDF) that provides substantially similar information.

11. Financing commitments.

12. Operating subsidy commitment, if applicable.

13. Relocation Plan and Budget, if applicable.

14. Signed Certifications in Enclosure B.

15.Description of any changes to the Project Requirements (Table 5 of this RFP) requested.

16. Any other materials required to evaluate scoring criteria.

5. General Terms and Conditions

1. This RFP does not commit to the City/Authority to pay any cost incurred in the preparation of a submittal to this RFP or in subsequent negotiations.

2. At any time prior to the specified time and date set for the submission, a person/firm, or a designated representative, may withdraw a proposal that has been submitted.

3. The issuance of this RFP and the acceptance of a submittal do not constitute an agreement by the Authority that the Authority will approve an assignment or extension of the existing Ground Lease, a contract to manage the Project, or a new ground lease. The Authority expressly reserves the right to:
a. Reject any or all proposals.
b. Reissue an RFP.
c. Extend the period for submission of the proposals by notification to all parties who have registered an interest in this RFP with the City. d. Request more information from any or all Proposers.
e. Waive any immaterial defect or informality.
f. Decline to go forward with the RFP
g. Reject any proposal.

4. Final terms of any assignment or extension, agreement or lease will be established during negotiations. Negotiations may be terminated by the City/Authority for failure to reach mutually acceptable terms.

5. Each Proposer will be responsible for all costs incurred in preparing a response to this RFP.

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6. All materials and documents submitted in response to this RFP will become the property of the City/Authority and will not be returned. Proposers selected for further negotiations will be responsible for all costs incurred by it during negotiations regardless of the outcome of the negotiations.

7. Proposers are responsible for reviewing all portions of this RFP. A Proposer is to promptly notify the City, in writing, if a Proposer discovers any ambiguity, discrepancy, omission or other error in the RFP. Any such notification should be directed to the City promptly after discovery, but in no event later than five working days prior to the date for receipt of proposals.

A. Disclaimers
The City/Authority obtained the information contained in this RFP from sources deemed reliable; however, the City/Authority makes no guarantees, warranties, or representations, nor expresses or implies any opinion concerning the accuracy or completeness of the information provided. It is furnished solely as an aid to interested parties. Interested parties are responsible for undertaking all necessary investigations on and off the Project to determine the financial and physical condition of the Project.

Regarding the information submitted to the City/Authority by Proposers, please note: The California Public Records Act mandates public access to government records. There is a presumption that documents prepared, owned, used, or retained by a public agency are public records and therefore accessible by the public.

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6. Enclosures
Enclosure A Insurance Requirements
Enclosure B Proposer Certifications
Enclosure C County of San Mateo Promissory Note , Deed of Trust, and Declaration of Restrictive Covenants (1998)
Enclosure D Ground Lease by and Between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
Enclosure E First Amendment to the Ground Lease by and Between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
Enclosure F Ground Lease by and Between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998) Second Amendment to the Ground Lease by and Between the
Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (2000)
Enclosure G Loan and Regulatory Agreements by and between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
Enclosure H Addendum to the Loan and Regulatory Agreement by and between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
Enclosure I Loan and Regulatory Agreements (Bond Proceeds) by and between the Redevelopment Agency of the City of Brisbane and BRIDGE Housing Corporation (1998)
Enclosure J Declaration of Restriction by Brisbane Senior Housing, Inc. (2000) Enclosure K 2022 Audited Financial Statement
Enclosure L 2023 Audited Financial Statement
Enclosure M 2024 Audited Financial Statement
Enclosure N 2025 Budget
Enclosure O Current Rent Roll
Enclosure P Capital Needs Assessment for Visitacion Gardens Apartments prepared by Integrated Property Analysis, Inc. (2024)
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Enclosure A

Enclosure A – Insurance Requirements
Prior to assuming or extending the existing Ground Lease, entering into an agreement to operate and manage the Project, or entering into a new ground lease, the following policies of insurance shall be obtained and maintained:
(a) Type of policies and coverage:
(1) Commercial General Liability Coverage. Consultant shall maintain commercial general liability insurance in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, and $2,000,000 products and completed operations aggregate for bodily injury, personal injury and property damage, providing coverage at least as broad as Insurance Services Office Commercial General Liability form CG 00 01. The policy shall include a per project or per location general aggregate endorsement. If a per project/location endorsement is not available, the limit for the general aggregate shall be doubled. (2) Automobile Liability Coverage. Consultant shall maintain business automobile liability insurance in an amount not less than $1,000,000 each accident combined single limit for bodily injury and property damage, providing coverage at least as broad as Insurance Services Office form CA 00 01 Code 1 (any auto). (3) Workers' Compensation and Employer's Liability Coverage. Consultant shall maintain workers' compensation insurance as required by the State of California and employer's liability insurance in an amount not less than $1,000,000 each accident, $1,000,000 by disease-policy limit, and $1,000,000 by disease-each employee for any and all persons employed directly or indirectly by Consultant in connection with the performance of services under this Agreement. In the alternative, Consultant may rely on a self-insurance program to provide this coverage so long as the program of self-insurance complies fully with the provisions of the California Labor Code. The insurer, if insurance is provided, or Consultant, if a program of self-insurance is provided, shall waive all rights of subrogation against City for loss arising from work performed by Consultant for City. (4) Professional Liability Coverage. Consultant shall maintain professional liability insurance that insures against professional errors and omissions in an amount not less than $1,000,000 per claim and in the aggregate, covering negligent acts, errors or omissions which may be committed by Consultant in the performance of its services under this Agreement.

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Enclosure A

(b) Endorsements: Each general liability and automobile liability insurance policy shall contain and be endorsed to contain, the following provisions:
(1) The City, its officers, officials, employees, agents, and volunteers are to be covered as additional insureds as respects: liability arising out of activities performed by or on behalf of Consultant; on Insurance Services Office form CG 20 10 (or equivalent) for ongoing operations, and on Insurance Services Office form CG 20 37 (or equivalent) for products and completed operations of Consultant; premises owned, occupied or used by Consultant; or automobiles owned, leased, hired or borrowed by Consultant. The coverage shall contain no special limitations on the scope of protection afforded to City, its officers, officials, employees, agents or volunteers.
(2) For any claims related to the Project, Consultant's insurance coverage shall allow and be endorsed primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by City, its officers, officials, employees, agents or volunteers shall be excess of Consultant's insurance and shall not contribute with it. (3) The commercial general liability, automobile liability and workers’ compensation policies shall allow and be endorsed to include a waiver of subrogation in favor of the City, its officers, officials, employees, agents, and volunteers.
(4) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to City, its officers, officials, employees, agents or volunteers.
(5) Consultant's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.
(6) Consultant's insurance coverage shall not be suspended, voided, canceled or reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to City. If a carrier will not provide the required notice, the Consultant shall provide written notice to the City no later than five (5) business days before policy modification or cancellation. (c) Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by City. At City's option, Consultant shall ATTACHMENT 1
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demonstrate financial capability for payment of such deductibles or self-insured retentions.
(d) Acceptability of Insurers. Insurance is to be placed with insurers having a current A.M. Best rating of no less than A:VII, unless otherwise approved by City in writing. (e) Verification of coverage. Consultant shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required by this Agreement. Certificates of such insurance and endorsements shall be filed with City before commencement of work by Consultant. At the request of City, Consultant shall provide complete, certified copies of all required insurance policies, including endorsements effecting the coverage required by this Agreement.

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Enclosure B

Enclosure B – Proposer Certifications
Proposer hereby certifies:

1. Truth of Application
That the information submitted in the proposal and any supporting materials is true, accurate, and complete to the best of its knowledge. Proposer acknowledges and understands that if facts and/or information herein are found to be misrepresented, it shall constitute grounds for rejecting the proposal or ending negotiations.

2. Applications are Public Records
That Proposer acknowledges that the information submitted as part of this proposal may be made available to the public pursuant to a request under the California Public Records Act.

3. Legal Authority
The signatory has the legal authority to submit this proposal on behalf of the Proposer.

4. Civil and Legal Questions (include an explanation for any questions answered “Yes”)
a. Has the Proposer filed bankruptcy or receivership or had a bankruptcy or receivership commenced against it, defaulted on a loan, or been foreclosed against in the past ten years?
b. Is the Proposer currently a party to, or has it been notified that it may become a party to any civil litigation that may materially and adversely affect the financial condition of the Proposer’s business in this proposal?
c. Have there been any administrative or civil settlements, decisions, or judgements against the Proposer within the past 10 years that materially and adversely affected the financial condition of the Proposer’s business in this proposal?
d. Is the Proposer currently subject to, or been notified that it may become subject to, any civil or administrative proceeding, examination, or investigation by a local, state, or federal licensing or accreditation agency, a local, state, federal taxing authority, or a local, state, or federal regulatory or enforcement agency?
e. In the past 10 years, has the Proposer been subject to any civil or administrative proceeding, examination, or investigation by a local, state, or federal licensing or accreditation agency, a local, state, or federal taxing authority, or a local, ATTACHMENT 1
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state, or federal regulatory or enforcement agency that resulted in a settlement, decision, or judgment?
f. Is the Proposer currently a party to, or the subject of, or been notified that it may become a party to or the subject of, any criminal litigation, proceeding, charge, complaint, examination, or investigation, of any kind, involving, or that could result in felony charges against the Proposer?
g. Is the Proposer currently a party to, or the subject of, or been notified that it may become a party to or the subject of, any criminal litigation, proceeding, charge, complaint, examination or investigation, of any kind, involving, or that could result in misdemeanor charges against the Proposer for matters relating to the conduct of the Proposer’s business?
h. Is the Proposer currently a party to, or the subject of, or been notified that it may become a party to or the subject of, any criminal litigation, proceeding, charge, complaint, examination or investigation, of any kind, involving, or that could result in criminal charges against the Proposer for any financial or fraud related crime?
i. Is the Proposer currently a party to, or the subject of, or been notified that it may become a party to or the subject of, any criminal litigation, proceeding, charge, complaint, examination or investigation, of any kind, involving, or that could result in criminal charges against the Proposer that could affect the financial condition of the Proposer’s business?
j. Within the past 10 years, has the Proposer been convicted of any felony? k. Within the past 10 years, has the Proposer been convicted of any misdemeanor related to the conduct of the Proposer’s business?
l. Within the past 10 years, has the Proposer been convicted of any misdemeanor for any financial or fraud related crime?
Proposer Name and Title: Organization:
_____________________________________________________________ ____________ Signature Date
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ATTACHMENT 1
2905 S. El Camino Real, San Mateo, CA 94403 | (650) 204-5640 | heartofsmc.org September 29, 2025
Julia Ayres, Principal Planner
50 Park Place
Brisbane, CA 94005
Re: Visitacion Garden Senior Apartment, 8 Visitacion Avenue/3 Inyo Street, Brisbane, CA (the "Project")
Dear Ms. Ayres,
This letter sets forth our proposal to enter into a new ground lease and management agreement for the Project. The purpose of this letter is to summarize the material terms of our mutual understanding regarding the ground lease and management of the Project by the Housing Endowment and Regional Trust of San Mateo County (“HEART” or “Buyer”) and its assignee, HEART-SV. The landowner is referred to as the “City.”

1. Debt Assumption HEART is willing to assume the existing City and County of San Mateo loans (“Debt”) on the condition that an appraisal demonstrates that the leasehold interest and improvements have a value equal to or greater than the Debt. If the valuation is less than the Debt, HEART requests a restructuring of the Debt.

2. Acquisition Price The assumed (or restructured) Debt shall constitute the “Acquisition Price” of the Project.

3. Due Diligence Period HEART intends to conduct a full due diligence review, including an appraisal, property needs assessment, Phase I environmental report (if not already provided by the City), and any other studies deemed necessary. HEART will have forty-five (45) days from the date the City notifies HEART that the City Subcommittee is recommending HEART for the Project (the “Due Diligence Period”). At the start of the Due Diligence Period, City will deliver to HEART any due diligence materials provided by the current owner.

4. Assignment The City acknowledges that, immediately prior to closing, Buyer will assign the Project acquisition to HEART-SV, an affiliate of HEART, which will take title.

5. Financing Based on the information provided in the Request for Proposals, HEART believes that existing rental revenue is sufficient to cover general operating expenses. However, outstanding repairs and future capital needs identified in the capital needs assessment exceed projected revenues. To address this gap, HEART proposes a ATTACHMENT 2
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2905 S. El Camino Real,San Mateo, CA 94403 | (650) 204-5640 | heartofsmc.org combination of a new City loan and a HEART loan. Following our own property needs assessment, HEART will confirm whether a capital infusion is necessary and, if so, in what amount, or whether future repairs can be funded through rent revenue.

6. Rent Restriction HEART accepts and proposes to maintain the existing rent restrictions, while implementing subsidy “stacking” to ensure long-term project sustainability. HEART proposes one modification: replacing two 40% AMI units with one 30% AMI unit and one 50% AMI unit. This will allow rents to align with the State Office of Housing and Community Development (HCD) published rent levels.

To maintain viability, HEART intends to rent four units at 80% AMI.

However, Health & Safety Code §§50053 and 50052.5 require that units restricted at 80% AMI be rented at 60% AMI rent levels. To serve 80% AMI households at appropriate rents, these units must instead be deed restricted at 120%. A table summarizing the current and proposed restrictions, subsidy stacking, and targeted occupancy is shown below.

7. Current Tenants HEART will honor all existing leases and designated AMI rent levels for tenants currently residing at the Project.

8. Affordability Because the City’s original funding for the Project came from the former Redevelopment Agency, HEART understands that H&SC dictates the method of calculating rents for units regulated by the City deed restriction. HEART and the City further acknowledge that if City and County subsidies are stacked, five units will be subject to the lesser of HUD HOME Income Limits or H&SC-based limits.

9. Property Management HEART believes that the Project’s prior financial challenges stemmed in part from reliance on part-time, on-site management and maintenance. We propose utilizing a capable, responsive off-site property management team to ensure both quality service to tenants and proper maintenance. Should this approach fall short, HEART is willing to adjust its strategy.

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2905 S. El Camino Real,San Mateo, CA 94403 | (650) 204-5640 | heartofsmc.org

10. Repairs and Upgrades HEART proposes a $300,000 construction budget to address identified repairs needed in the next three years. In addition, HEART will capitalize a $90,000 reserve fund and contribute 10% of gross income annually, beginning with approximately $20,000 in the first year, with contributions increasing in subsequent years. The combination of construction budget, capitalized reserves and the annual deposits to the reserve are sufficient to address all of the repairs identified in the capital needs assessment provided in the request for proposals.

11. Non-Binding Effect This proposal reflects the mutual understanding of the parties with respect to the general terms and conditions of the proposed transaction.

Except for provisions expressly intended to be binding (if any), this proposal is non-binding and subject to the negotiation and execution of mutually acceptable definitive agreements.

Thank you for considering this proposal. We look forward to further discussions and to working together to preserve and strengthen affordable housing in the City of Brisbane.

Sincerely,
Armando F. Sanchez
Executive Director.

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ATTACHMENT 1
Statement of Intent
HEART is proposing a new 55-year ground lease to operate and manage the Project.

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ATTACHMENT 1
HEART’s Proposed Approach
HEART proposes to assume the existing Debt on the condition that an appraisal demonstrates the leasehold interest and improvements have a value equal to or greater than the Debt. HEART will conduct an appraisal as part of its due diligence review and if the valuation is less than the Debt, HEART requests to restructure the Debt.

The provided 2024 Capital Needs Assessment by Integrated Property Analysis identifies $796,200 in capital needs. Completing the repairs based on the Assessment’s schedule, the future cost of these repairs with inflation will be approximately $980,460. However, the existing Project revenue does not support this level of repairs. To address this deficit, HEART proposes to establish a $363,000 construction budget to immediately finance the first 3 years of capital needs, fund a $90,000 capital reserve, and contribute 10% of gross income annually to the capital reserve fund. The immediate repairs, future repair schedule and total cost are subject to change based on the property needs assessment HEART will conduct once the City notifies HEART that the City Subcommittee is recommending HEART for the Project.

To pay for all costs associated with assuming the Project, including pay for the immediate repairs, the capital reserve, and the operating reserve, HEART is proposing a combination of a new $350,000 City loan and a 15-year $262,350 HEART loan.

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ATTACHMENT 1

HEART MULTIFAMILY LOANS
HEART's role is to provide predeveldopment and/or permanent financing to multifamily projects for new construuction, preservation and predevelopment.

Development Developer Borrower Units
Afford.

Units Type Status
HEART Loan
Amount Note Date Repayment Type Total Devt Costs
Stambaugh HEART-SV HEART-SV 8 8 Preservation Completed $1,900,000 7/29/24 Residual Receipts $3,760,327 Stambaugh HEART-SV HEART-SV 8 8 Preservation Completed $450,000 2/29/24 Repaid Ridge at Ralston CRP
CRP Affordable
Communities
65 64 New Construction Predevelopment $1,000,000 7/1/24 Balloon, Interest annually $61,272,000
Ridge at Ralston CRP
CRP Affordable
Communities
65 64 New Construction Predevelopment $3,000,000 1/1/24 Balloon, Interest annually
Colibri MidPen Housing MP 965 Weeks
Street Ass.
136 135 New Construction Construnction $3,230,000 10/1/23 Residual Receipts $140,737,067 493 Eastmoor Ave CORE
Eastmoor
Multifamily 72 71 New Construction Predevelopment $3,000,000 9/18/23 Repaid $71,774,000 Kiku MidPen Housing Donwtown SM
Partners
225 223 New Construction Construnction $3,800,000 12/17/21 Residual Receipts $169,000,000 Nugent Square EDEN/

EPACANDO
Nugent Square
Partners
32 31 Rehabilitation Completed $850,000 9/13/21 Repaid $850,000 353 Main Street
Family Apartments ROEM
353 Main Street
Apartments
125 124 New Construction Completed $3,500,000 7/29/19 Repaid $87,894,313 PSD Oddstad Blvd. Pacifica School
District
Pacifica School
District
70 45 New Construction Predevelopment $900,000 7/1/18 Repaid $24,000,000 2821 El Camino Real
Unincorporated
(North Fair Oaks)
Palo Alto Housing 2821 ECR LLC 67 66 New Construction Completed $3,500,000 10/2/17 Repaid $33,899,243 Bay Meadows
Affordable
San Mateo
BRIDGE Winfield Hill, Inc. 68 67 New Construction Completed $500,000 2/21/17 Repaid $46,958,277 Jefferson Av.

Homeownership
Redwood City
Habitat for
Humanity
Habitat for
Humanity Greater
San Francisco
20 20 New Construction Completed $500,000 2/24/15 Repayment: $12,500 semi-annual $10,262,000
10 Year Totals: 961 926 $26,130,000 $650,407,227
Table 1: Experience Last 10 Years
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ATTACHMENT 1
Project Units Affordable Purchase Price Year Purchased Years in Service Role Current Status 232 Miller Avenue, SSF 2 2 $700,000 2006 7
Acquisition, property
management
Demolished, New Parking
Structure
217-219 Grand Avenue, SSF 1 1 $1,500,000 2010 3
Acquisition, rehab,
property management
Demolished, New Affordable
Housing Development
310-314 Miller Avenue, SSF 12 12 $4,215,672 2001-2008 15 Acquisition, rehab,
property management
Demolished, New Affordable
Housing Development
714-718 Linden Ave, SSF 3 3 $755,118 2005 20
Acquisition, rehab,
property management Affordable 3-plex
339-341 Commecial Ave, SSF 4 4 $932,705 2007 18
Acquisition, rehab,
property management Affordable 4-plex
Table 2: Armando Sanchez Preservation Experience
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ATTACHMENT 1
HEART Experience
HEART is a Joint Powers Authority founded in 2003 in collaboration with the County of San Mateo and its cities to address the region’s need for affordable housing for low- and moderate-income families. HEART operates a capital trust fund to provide short- and medium-term loans for the acquisition, predevelopment, and rehabilitation of affordable multifamily projects. Table 1 provides an overview of HEART’s loan portfolio over the last 10 years.

In 2024, HEART launched its Preservation Program and established an affiliate organization, HEART-SV, to acquire Naturally Occurring Affordable Housing (NOAH) properties and provide rent stability for existing tenants. In July 2024, HEART completed its first acquisition of an 8-unit property in Redwood City, propelling HEART into property acquisition and operations.

Armando Sanchez, Executive Director of HEART brings over 15 years of experience as a consultant with South San Francisco where he led the purchase and operations of 5 properties detailed in Table 2.

Key Principle
Armando Sanchez
[email protected]
(650) 204-5641
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ATTACHMENT 1
HEART
Organization Chart
Board of Directors
Executive Director
Business &
Operations
Audrey
Washington

0.5 FTE
Bookkeper
Mid-Income
Housing Program
Developer Loan &
NOAH
Preservation
Boris Vatkin

0.7 FTE
Mac Hart

1.0 FTE
Audrey
Washington

0.5 FTE
First Time
Homebuyer / ADU
Programs
Boris Vatkin

0.2 FTE
Mobile Home
Loan Program
Boris Vatkin

0.1 FTE
Alex Waggoner

0.5 FTE
City Services
Tim Davis

1.0 FTE
Alex Waggoner

0.5 FTE
Leslie Valencia

1.0 FTE
Legal Counsel
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HEART-SV
Organization Chart
Board of
Directors
Executive
Director
A. Sanchez
Middle Income
Housing Program
RBC Capital
Markets
Manatt Housing
Solutions
NOAH
Preservation
Progam
Property
Manager
Legal Cousel HEART Staffing
Indicates consultants and outside services
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Joint Exercise of Powers Agreement

HEART-SV
This Agreement is entered into the ___ day of ___________ 2023, pursuant to the provisions of the Joint Exercise of Powers Act (Title 1, Division 7, Article 1, §6500 et seq. of the California Government Code), is by and between the Housing Endowment and Trust of San Mateo County (“HEART”) and those Counties, Cities and Towns, School Districts, College Districts and any other Public Agency who become signatories to this Agreement, and relates to the joint exercise of powers among the signatories hereto, each of which, including HEART, is hereafter individually referred to as “Member Agency” and collectively referred to “Member Agencies”.

RECITALS
A. The Member Agencies have determined that there is an undersupply of affordable housing for “low income,” “median income” and “moderate income” residents of the State of California and wish to provide for the public good and promote the health, safety, education, and/or welfare of the citizens of the State by making dwelling units available to such residents within their geographic boundaries.

B. Each Member Agency has the individual power to plan, acquire, construct, manage, regulate, operate, finance and control the development, construction and operation of housing programs generated within its jurisdictional boundaries, as well as to create and issue development agreements for such activities.

C. The Member Agencies find it in their mutual economic interest to address housing needs of their residents on a regional level.

D. An adequate supply of housing will provide social and economic benefits to residents and taxpayers of the Member Agencies.
23 May
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E. The Member Agencies desire to act in the public interest to lessen the burden on government by reducing the need for each Member Agency to act individually, and to provide charitable support for housing within their geographic boundaries.

F. California Government Code §6500 et seq. (“Joint Exercise of Powers Act” or “Act”) permits two or more public agencies to create joint powers authorities for the purposes cited herein, and permits the agencies to exercise jointly any power that the public agencies could exercise separately, and further grants certain additional powers to such joint powers authorities.

G. Local land-use decisions remain solely with the Member Agencies. Nothing in this Agreement deprives member agencies of their sovereign powers or transfers those powers to the joint powers authority.

NOW, THEREFORE BE IT RESOLVED that the Member Agencies do hereby establish the entity to be known as HEART-SV, to generate and/or maintain housing, disburse funding, and take other actions that will result in permanent additions to the housing stock within HEART-SV’s jurisdictional boundaries, and do hereby agree as follows:

1. Purpose.

1.1 The purpose of this Agreement is to establish an organization that shall be responsible for the joint acquisition, management, operation, fundraising, planning, adoption, financing, administration, review, monitoring and reporting of certain housing program activities in the region for the benefit of low, median and moderate income residents. By entering this joint powers authority, the Member Agencies earn economic benefits not realized when operating individually. Further, the establishment of this joint powers authority provides for the economic viability and coordination of housing program financing and facilities throughout HEART-SV’s jurisdictional boundaries.

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1.2. HEART-SV shall be an entity which is legally independent from the parties to this Agreement, and shall be responsible for the administration of this Agreement.

1.3 The assets, rights, debts, liabilities, and obligations of HEART-SV shall not constitute assets, rights, debts, liabilities, or obligations of any of the Member Agencies. However, nothing in this Agreement shall prevent any of the Member Agencies from separately contracting for, or assuming responsibility for, specific debts, liabilities, or obligations of HEART-SV, provided that both the Board and the Member Agency approve such contract or assumption.

2. Powers.

2.1 HEART-SV is authorized, but is in no way required, to act in its own name on any or all of the following matters, as each Member Agency could act separately, and as it deems in the best interest of its Members, to the extent permitted by any and all applicable laws, codes, ordinances, resolutions and regulations:
a. Facilitate and assist the Member Agencies and others in the housing sector to acquire, construct, rehabilitate, finance, refinance, operate, regulate and maintain low, median and moderate income and/or affordable housing programs, projects and facilities (“HEART-SV Housing Programs”).
b. Facilitate the planning, study, and recommendation of proper and appropriate HEART-SV Housing Programs, and management practices. Research and study issues related to housing, including without limitation workforce, affordable and special needs housing.
c. Educate the public, its Member Agencies, and other agencies and entities as to HEART-SV Housing Programs.
d. Provide for or enter into agreements to provide for financial, construction, engineering, legal, audit, and any other professional services supporting any of the HEART-SV Housing Programs or related activities.
e. Solicit, apply for, accept, and receive grants, gifts, donations, advances, and contributions.
f. Hire agents and employees, including consultants and legal counsel. g. Sue and be sued in its own name.

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h. Incur and discharge debts, liabilities, and obligations which may include but shall not be limited to being in the form of secured bonds, revenue bonds or other forms of secured or unsecured debt.
i. Issue bonds or notes and associated covenants, for designated purposes, subject to the provisions and limitations of the California Government Code. j. Acquire or protect any necessary security or leasehold interests involved in loans, bonds, notes, or other financing methods implemented to carry out the purposes of this Agreement.
k. Acquire, hold, lease, improve, construct, rehabilitate, maintain, pledge, assign, mortgage, operate and dispose of real and personal property as may be necessary and appropriate in connection with the creation, construction, financing, development, and maintenance of certain workforce and affordable housing, and the programmatic needs of HEART-SV.
l. Issue and receive loans.
m. Acquire such insurance protection as it deems necessary. n. Adopt, as authorized by California law, resolutions necessary to carry out the purposes of this Agreement
o. Utilize and establish advisory committees or subcommittees whenever necessary. p. Form wholly owned and controlled affiliate entities to accomplish any of its purposes.
p. Adopt bylaws and such other rules and procedures as may be deemed necessary. q. Convey real and/or personal property interests, and/or funds. r. Other acts necessary to carry out the actions identified above.

2.2 HEART-SV shall undertake, facilitate and encourage the acquisition, creation, construction, development, and maintenance of certain workforce, affordable and other public benefit housing, programs, projects and facilities.

3. Term and Termination

3.1 This Agreement shall be effective upon its execution by HEART and at least one Member Agency.

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3.2 This Agreement shall continue at least until May 22, 2033, and thereafter shall continue until terminated or dissolved pursuant to Section 3.3 of this Agreement. However, in no event shall the Member Agencies vote to terminate or dissolve HEART-SV if its termination or dissolution would conflict with or violate the terms or conditions of any bonds, financial instruments, or related documentation by or on behalf of HEART-SV, including, without limitation, indentures, resolutions, and letter of credit agreements.

3.3. This Agreement may be terminated by consent of all Member Agencies, and upon full and complete liquidation of all liabilities, including, but not limited to any bonds. Upon the date of termination (hereinafter “Termination Date”), payment of any and all obligations and division of any and all assets of HEART-SV shall be conducted subject to the then-applicable requirements of the law, pursuant to the following:
a. In the event of termination of HEART-SV, where there is a successor public agency that will conduct all of the activities of HEART-SV and will assume all of its obligations, any and all HEART-SV assets and liabilities remaining upon termination of HEART-SV shall be transferred to the successor public agency.
b. If there is no successor public agency that would conduct HEART-SV’s activities, all assets and liabilities shall be apportioned to each Member Agency in proportion to the contribution of each Member Agency’s total contribution during the term of this Agreement.

Notwithstanding the above, any real property assets shall be distributed to the Member Agency in which such real asset is located.
c. If there is a successor public agency that would conduct some of HEART-SV’s activities, then the Board shall allocate HEART-SV’s assets and liabilities between the successor public agency and the Member Agencies each in proportion to its total contribution during the term of this Agreement. Notwithstanding the above, any real property assets shall be distributed to the Member Agency in which such real asset was located. d. In the event HEART-SV is terminated under circumstances falling within (b) or (c) above, all decisions of the Board with regard to determinations of amounts to be transferred under the requirements of this Agreement to the Member Agencies or any successor shall be final.

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f. By unanimous agreement of all then current Member Agencies, said current Member Agencies may dispose of, divide, distribute, or return assets on a basis different from that established in this Section 3, but only in accordance with the terms of any financing related to such assets and if such financing was exempt from state and federal income taxation, only with an opinion of bond counsel that such disposition will not adversely affect such tax exemption.
g. The assets distributed pursuant to this Section 3 to Member Agencies will be used for public purposes and will not inure to the benefit of any private person.

4. Governance

4.1 HEART-SV is governed and administered by a Board of Directors (“Board”) that shall exercise all powers and authority on behalf of HEART-SV. The Board shall consist of no more than 31 voting members (hereinafter “Directors”), as follows:
21 No more than twenty-one (21) voting Public Directors and At Large Directors of the HEART Board of Directors (“HEART Directors”). 10 No more than ten (10) Member Agency representatives or individuals who are not representatives of a Member Agency, appointed by a majority vote of the Directors present at the meeting. These Directors shall be referred to as the “Regional Directors”.
15 The sum of all Directors representing a Public Agency, whether a HEART Director or a Regional Director, shall at all times be at least one more than the number of Directors from a non-public agency.

The number of HEART-SV Directors shall at all times be at least one more than the number of Regional Directors.

Additional ex-officio, non-voting, Affiliate Directors may be established by majority Board action, and such Affiliate Directors shall be referred to as “Affiliates”. Regular attendance by each Director and Affiliate shall be encouraged by the HEART-SV Board and the Member Agencies.

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4.2. Directors shall hold office as follows:
a. The HEART Directors’ terms shall be the same as their HEART Board terms, and shall be served concurrently with their HEART Board term. If a HEART Director is no longer serving on the HEART Board, they shall immediately be removed from the Board. b. The Regional Directors’ terms shall be three (3) calendar years, running from March of the first year through February of the third year. c. There shall be no limit to the number of terms that a Director may serve.

4.3. Directors shall receive no compensation from HEART-SV for serving on the Board.

HEART-SV may reimburse Directors for reasonable expenses necessarily incurred on the Board’s behalf, with prior approval of the Board.

4.4 The Board shall establish an Executive Committee to carry out any and all functions of the Board that the Board may delegate to said Executive Committee. Executive Committee members shall be Board members, but the exact composition of the Executive Committee shall be as determined by the Board.

4.5 The Board may establish an Advisory Committees to advise the Board or the Executive Committee. Advisory Committee members need not be Board members. The composition and role of an Advisory Committee shall be as determined by the Board.

5. Budgets and Financing.

5.1 The Board annually shall adopt, by a date HEART-SV designates by resolution, an operating budget for HEART-SV setting forth anticipated expenses, financing sources and proposed service levels necessary to carry out the purposes of this Agreement. The budget for HEART-SV shall distinguish between Administrative costs (i.e., the cost of operating HEARTSV) and Program costs (i.e., the financing of the programs funded or sponsored by HEART-SV).

HEART-SV shall establish its fiscal year by resolution. Contributions from private persons or entities and not-for-profit entities, whether or not their interests are represented by any Directors, are acceptable so long as they do not cause a violation of any applicable conflict of interest statutes, rules or regulations.

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5.2 The particular Programs and Program budget, funded, sponsored or operated by HEARTSV, as well as the level of, and mechanisms for, the involvement of HEART-SV and each Member Agency, in such Programs and Program budget, shall be determined and approved by the Board. A Member Agency’s individual contribution, involvement and role in any particular Program or the Program budget shall be as may be mutually agreed between the Member Agency and HEART-SV. By way of example only, said contributions, involvement or role may include: cash contributions, provision of services or staffing, use or transfer of title to real or personal property, pledges, guarantees or whatever other instruments or involvement the Member Agency and HEART-SV may agree to. Contributions of all kinds to the Program budget from private persons or entities and not-for-profit entities, whether or not their interests are represented by any Directors, are encouraged, so long as they do not cause a violation of any applicable conflict of interest statutes, rules or regulations.

6. Financial Management

6.1. HEART-SV may appoint a financial manager to manage, hold, invest and distribute the funds of HEART-SV (“Financial Manager”). The duties of the Financial Manager shall include those responsibilities as deemed necessary or appropriate by the Board. There shall be a strict accountability of all funds and report of all receipts and disbursements.

6.2. The public office or officers or person or persons who may be designated to have charge of, handle, or have access to any property of HEART-SV, shall file an official bond in an amount to be fixed by the Board.

7. Staffing.

7.1. It is understood that HEART-SV will require the support of administrative staff. When deemed necessary, the Board may employ or use a managing agent (“Managing Agent”), to implement the objectives of HEART-SV. The Managing Agent may consist of a separate entity or an executive director. The Board shall have responsibility for all employment decisions regarding said Managing Agent, who shall serve at the pleasure of the Board.

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7.2. The Managing Agent may be delegated authority as deemed necessary or appropriate by the Board.

7.3. The Managing Agent shall be responsible for the day-to-day administration of HEARTSV under the direction of the Board. The Managing Agent shall have the authority to employ or use administrative staff consistent with the goals, needs and approved budget of HEART-SV.

7.4 If there is a Managing Agent that is a separate entity, that Managing Agent shall designate who on its staff shall be the Executive Director of HEART-SV, but the acceptance of such choice shall be subject to the approval of the Board.

8. Meetings

8.1. The Board shall schedule by Resolution at least two (2) regular meetings each Fiscal Year.

8.2. Special meetings of the Board may be called by the Chairperson and otherwise as in accordance with provisions of California Government Code §54956 and/or HEART-SV’s bylaws.

8.3. All meetings of the Board shall be held subject to the provisions of California Government Code §54950 et seq. (the “Brown Act”) and other applicable laws of the State of California.

8.4 All meetings of the Board must be held within the County of San Mateo at a location determined by the Chairperson, except that the Board may hold a special meeting outside the County of San Mateo upon an affirmative vote in accordance with Section 8.8 of this Agreement.

8.5 The Secretary shall cause the taking and keeping of minutes of all Board meetings.

Promptly after each meeting, the Secretary shall cause a copy of the minutes to be forwarded to each Director, either electronically or in paper form.

8.6 A majority of the current and appointed Directors shall constitute a quorum for the transaction of business of the Board, except that Directors constituting less than a quorum may adjourn any meeting.

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8.7 Each Director is entitled to cast one vote on any matter presented to the Board for a vote.

8.8 All decisions and actions shall be by a majority of the total number of Directors, regardless of the number of Directors and/or Affiliate Directors present, unless otherwise provided in this Agreement. For example, with 21 total current Directors, 11 votes are required for a decision or action by the Board; and with 13 total current Directors, 7 votes would be required.

8.9 Meetings of the Board shall be conducted by a Chairperson, or in the Chairperson’s absence by the Vice Chairperson. In the absence of both the Chairperson and the Vice Chairperson, meetings shall be conducted by the HEART Director in attendance who represents the largest HEART Member Agency with Board representation, by population.

9. Bylaws. The Board from time to time may adopt and amend bylaws for the conduct of its affairs, provided that they are consistent with this Agreement and are necessary and appropriate in order to carry out HEART-SV’s purpose.

10. Officers and Employees.

10.1 Every two (2) years, the Board shall elect a Chairperson and a Vice Chairperson from among its members.

10.2 The Board shall appoint a Secretary who may, but need not be, a member of the Board.

10.3 The Board shall select a Treasurer, from one of the Member Agencies or a certified public accountant, who shall be the depository and have custody of all the money and property of HEART-SV from whatever source. The duties of HEART-SV Treasurer shall include those set forth in the Act, including those set forth in Government Code §6505.5. The Treasurer may, if the Board so elects, also serve as the Financial Manager.

10.4 HEART-SV shall designate its legal counsel.

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11. New Members. New Member Agencies may be added to HEART-SV by a majority vote of the Directors present at the meeting. Membership is effective immediately upon execution of this Agreement by the new Member.

12. Withdrawal. Any Member Agency may withdraw from this Agreement effective as of the end of any fiscal year, provided ninety (90) days prior written notice is provided to the other Member Agencies. The rights and obligations of such withdrawing Member Agency shall terminate as of the last day of the fiscal year. The withdrawal of any Member Agency from this Agreement shall in no way affect the rights and obligations of the remaining parties. If a Member Agency withdraws from this Agreement, such Member Agency shall not be entitled to the return of any funds contributed to HEART-SV nor to the return in cash or in kind of any materials or supplies until termination of this Agreement. If a withdrawing Member Agency has obligations under contracts or commitments, including bonds, that are independent from its obligations to HEART-SV, such withdrawal from HEART-SV shall have no impact on such independent obligations.

13. Amendments. Except as provided in Section 11, as needed to admit a new Member Agency, subject to all legal obligations of HEART-SV, this Agreement may be amended by one or more supplemental agreements executed by all of the Member Agencies of HEART-SV.

14. Filings. The Secretary shall cause to be filed all required notices with the California Secretary of State, in accordance with California Government Codes §6503.5 and §53051.

15. Notices.

15.1. All notices to the Member Agencies shall be deemed to have been given to the Member Agencies when mailed, postage prepaid by United States mail, or when hand delivered to the governing body of each Member Agency during usual business hours at the principal office, or to the person apparently in charge of that office.

15.2 All notices to HEART-SV shall be deemed to have been given to HEART-SV when mailed, postage prepaid by United States mail, or when hand delivered to each of the ATTACHMENT 2
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Chairperson, Vice Chairperson, and any Executive Director of HEART-SV during usual business hours at the principal office, or to the person apparently in charge of that office.

16. Assignments; Other Agreements. This Agreement shall be binding upon and shall inure to the benefit of the successors of any Member Agency. No Member Agency may assign any right or obligation hereunder without the written consent of all other Member Agencies.

Participation in HEART-SV is not intended to preclude Member Agencies from entering into similar agreements with other jurisdictions.

17. Severability. If any provision of this Agreement or its application to any person or circumstances is held invalid or illegal by a final judgment of a court of law in the State of California, the remainder of this Agreement and the application of the provision to other persons or circumstances shall not be affected.

18. Headings. All section headings contained in this Agreement are for convenience and reference only. They are not intended to define or limit the scope of any provision of this Agreement.

19. Confirmation of Jurisdictional Authority. By signing this Agreement, the Member Agencies retain all jurisdictional authority granted to them by the State and/or their respective Charters. The powers and/or authority granted to HEART-SV pursuant to this Agreement shall in no way serve to limit or restrict an individual Member Agency’s jurisdictional authority.

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IN WITNESS WHEREOF, the parties hereto by their duly authorized representative, have affixed their signatures on this Agreement, effective as of the date first stated above.

HOUSING ENDOWMENT AND

REGIONAL TRUST OF SAN MATEO
COUNTY
By_________________________________
ATTEST: Executive Director
______________________________
Secretary of the Board

COUNTY OF SAN MATEO
By_________________________________
ATTEST: President of the Board of Supervisors
______________________________
Clerk of the Board
Armando F. Sanchez
5/4/23
Resolution No. 079645
Date: May 23, 2023
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HOUSING ENDOWMENT AND REGIONAL TRUST

OF SAN MATEO COUNTY
Financial Statements and
Independent Auditors’ Report
June 30, 2023 and 2022
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HOUSING ENDOWMENT AND REGIONAL TRUST

OF SAN MATEO COUNTY
JUNE 30, 2023 and 2022

TABLE OF CONTENTS
Independent Auditors’ Report 1 - 4
Management’s Discussion and Analysis 5 - 10
Basic Financial Statements:

Government-Wide Financial Statements
Statements of Net Positions 13
Statements of Activities 14
Fund Financial Statements
Balance Sheets – governmental fund 17
Statements of Revenues, Expenditures and
Changes in Fund Balance – governmental fund 18
Reconciliation of the Statements of Revenues,
Expenditures and Changes in Fund Balance of
Governmental Fund to the Statements of Activities 18
Notes to the Financial Statements 21 - 30
Required Supplementary Information:

Schedule of Revenues, Expenditures and
Changes in Fund Balance – Budget and Actual
Governmental Fund 33
Notes to the Required Supplementary Information 34
Supplementary Information:

Status of Funds 37
Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................. 39-41 ATTACHMENT 2
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INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the Housing Endowment and Regional Trust of San Mateo County, California (HEART), as of and for the years ended June 30, 2023 and 2022, and the related notes to the financial statements, which collectively comprise HEART’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of HEART, as of June 30, 2023 and 2022, and the respective changes in financial position thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of HEART and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements HEART’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about HEART’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 1 ATTACHMENT 2
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To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of HEART’s internal control. Accordingly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about HEART’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
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To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 5-9 and 33-34 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.

We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise HEART’s basic financial statements. The status of funds schedule is presented for purposes of additional analysis and is not a required part of the basic financial statements.

The status of funds schedule is the responsibility of management and is derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the status of funds schedule is fairly stated, in all material respects, in relation to the basic financial statements as a whole. 3 ATTACHMENT 2
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To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 4, 2024 on our consideration of HEART’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering HEART’s internal control over financial reporting and compliance.

Badawi and Associates, CPAs
Berkeley, California
March 4, 2024
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Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
As management of the Housing Endowment and Regional Trust of San Mateo County (HEART), we offer our readers of HEART’s financial statements this narrative overview and analysis of its financial activities for the fiscal year ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with the basic financial statements and related notes.

Financial Highlights
x HEART’s total net position as of June 30, 2023 amounted to $17,146,533, an increase of $1,716,882 from the prior year. This was the result of receiving $1.7 million in grant to its Trust Fund to assist in the development of affordable housing.
x Consistent with prior years, HEART’s net position primarily made up of $11.1 million in outstanding interest and loan receivables from affordable housing developers. x Cash and cash equivalents are $10,130,466. This amount is largely comprised of $4,620,000 in borrowed funds from the County of San Mateo Measure-K loan, $5,095,506 in HEART Trust Funds, and $414,960 in restricted funds. $9.1 million in cash and cash equivalents can only be used to develop affordable housing.
x During the fiscal year HEART made two preliminary loans commitments totaling $6 million dollars to support the development of affordable housing, but these funds will not be disbursed until the next fiscal year. During the year, HEART received one loan repayment in the amount of $678,726 from Nugent Square Partners.
x Total operating and program revenue for the year amounted to $2,064,968 comprised of $1.7 million in grants restricted for affordable housing, $236,286 in contributions from member agencies and the balance of $119,082 from loan origination fees, interest received, and donor contributions.

Overview of the Financial Statements
HEART’s basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-Wide Financial Statements
The government-wide financial statements are designed to provide the reader with a broad overview of HEART’s finances, in a manner similar to a private-sector business.

The statements of net positions present information on HEART’s assets and liabilities, with the difference reported as net positions. Over time, increases or decreases in net positions may serve as a useful indicator of whether the financial position of HEART is improving or deteriorating.

The statements of activities report how HEART’s net positions changed during the most recent two fiscal years. Changes in net positions are reported as soon as underlying events occur, regardless of the timing of the related cash flows. Thus, some revenues and expenses reported in this statement may result in cash flows only in future periods. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

The government-wide financial statements can be found on pages 13 and 14 of this report. 5 ATTACHMENT 2
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
Fund Financial Statements
A fund is a group of related accounts that is used to control resources that have been segregated for specific activities or objectives. HEART uses fund accounting to ensure compliance with various legal requirements, such as the annually adopted budget. Accordingly, a budgetary comparison schedule has been included in the supplementary information section of the financial statements to demonstrate compliance with budget.

Fund financial statements report essentially the same information as the government-wide financial statements. However, unlike the government-wide financial statements, fund financial statements focus on near-term inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year.

As required by accounting principles, the financial transactions of HEART are accounted for in a Special Revenue Fund, a governmental fund, as monies received by it are legally restricted to specific use. Monies allocated and disbursed to HEART can be expended only for purposes authorized under the Agreement.

The fund financial statements can be found on pages 17 through 18 of this report.

Notes to the Financial Statements
The notes to the financial statements on pages 21 through 30 provide additional information that is essential to the full understanding of the data provided in the government-wide and fund financial statements.

Other information
This report also presents certain required supplementary information concerning compliance with HEART’s annual budget. This information, as well as associated notes, immediately follows the basic financial statements and the accompanying notes.
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
Financial Analysis – Government-Wide Financial Statements Assets
Cash and cash equivalents
Receivables, net:

Interest
Loans
Accounts
Restricted assets:

Temporarily restricted:

Cash and cash equivalents
Total Assets
Liabilities
Accounts payable
Long-term liabilities
San Mateo County Measure-K Loan
Paycheck Protection Program Loan
Total Liabilities
Net Position
Restricted for:

Homebuyer Assistance Loan Program – pledge
account
Unrestricted
Total Net Positions
2023
$ 10,130,466
1,311,665
9,809,489
162,343
414,960
21,828,923
62,390
4,620,000
0 4,620,000
411,960
16,731,573
$ 17,146,533
2022
$ 8,053,608
1,118,907
10,512,573
533
411,932
20,097,553
47,902
4,557,500
62,500
4,667,902
411,932
15,017,719
$ 15,429,651
x HEART’s total assets are $21,828,960, an increase of $1,731,370. This is an increase of 9% compared to the prior year. A $1.7 million grant from the City of East Palo Alto is largely responsible for the net $1.7 million asset increase from the previous year. x Cash and cash equivalents increased from $8 million to approximately $10.1 million. The increase in cash and cash equivalents is largely to the $1.7 million grant from the City of East Palo Alto and the repayment of a $678,726 loan from Nugent Square Partners. x Loans outstanding decrease $703,084 due to the Nugent Square Partners loan repayment and a few other small loan repayments from other borrowers.
x Total liabilities for the current year are $4,682,390. This represents a small increase of $14,488 from the previous year. HEART’s total Measure-K loan from the county stands at $4,620,000. The remaining $62,390 in liabilities includes $57,792 in payroll liabilities and payroll tax payments due and $4,598 in accounts payable to consultants and miscellaneous vendors. 7 ATTACHMENT 2
97 B.

ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
x Net position of governmental activities is $17,146,533, an increase of $1,716,882, or 11% more compared to the previous fiscal year. The increase in net position was due to a $1.7 million grant from the City of East Palo Alto that is slated for a loan to for the development of Colibri Commons, and affordable housing development in the City of East Palo Alto.

Changes in Net Positions
Changes in Net Positions
Revenues:

Program Revenues:

Operating grants and contributions
Member Agencies
Donors
Charges for Services
Total Program Revenues
Expenses:

General management and admin support
Legal services
Interest on long-term debt
Miscellaneous
Total Expenses
Net Program Revenue
General Revenues – Investment Earnings
Change in Net Positions
Net positions – beginning
Net positions – ending
2023
$ 236,286
1,823,882
4,800
2,064,968
671,139
9,773
44,960
135
764,259
1,300,709
416,173
1,716,882
15,429,651
$17,146,533
2022
$ 236,280
4,165,177
23,078
4,424,535
524,837
24,816
44,960
-
594,613
3,829,922
58,889
3,951,311
11,478,240
$ 15,429,651
x Total operating and program revenue during the current period was $2,064,968, lower than the prior year’s amount of $4,424,535. This reflects a decrease in grants received to support the development of affordable housing. Grants received decreased from $4 million to $1.7 million. x Excluding the $1.7 grant from the City of East Palo Alto, operating and program revenue was $364,968. This amount is comprised of $236,286 from Member Agency contributions and $128,682 from other donations and program service fees.
x Total expenses incurred during the current period amounted to $764,259, an increase of $169,682, or 28.5% more, than the previous year. The vast majority (86%) of the increase in expenses is due to the addition of more staff at HEART to meet the increased program work load. 8 ATTACHMENT 2
98 B.

ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
Budgetary Analysis
Total Revenues and Other
Financing Sources
Total Expenditures and Other
Financing Uses
Net Change in Fund Balance
Budgeted Amount
Final
$ 798,848
798,848
$ - x
Actual Amount –
Budgetary Basis
$ 2,279,140
764,259
$ 1,514,259
Variance -Positive
(Negative)
$ 1,658,882
(34,589)
$ 1,514,881
Actual revenues were higher than budgeted by $1,658,882. While HEART’s individual revenue sources fluctuated and differed from the budgeted amounts, the $1.7 million grant awarded to HEART for affordable housing development was responsible for generating the large positive variance. Operating expenses were slightly below the amount budgeted by $34,589. Expenses were lower largely due the lower utilization of outside contract and consulting services.

Beyond FY 2023
In 2024 HEART is planning to continue making loans to affordable housing developers with its Trust Fund.

Currently, it is planning to make $6 million in loans to two affordable housing developments. Additional funds will be available to make more loans throughout 2024. These loans will help HEART achieve its mission of creating more affordable housing units, while increasing its revenue from developer loan origination fees.

Over the next year HEART will also expend significant resources creating new programs to create and preserve affordable housing by financing the acquisition of privately owned, existing apartment buildings and by providing staffing help to cities to assist them with carrying out their affordable housing programs.

HEART will also explore the possibility of developing a loan program to help mobile homeowners replace their units with new ones.

Due to continuing high interest rates, it is likely HEART’s first-time homebuyer down payment loan program, “Opening Doors,” will continue to see low demand for its loans. HEART will continue to present community workshops for first time homebuyers and work with realtors and cities to help buyers prepare for a time when homebuying becomes feasible again.

Requests for Information
This financial report is designed to provide a general overview of HEART’s finances for all those interested.

Questions concerning any of the information provided in this report, or requests for additional financial information should be addressed to Housing Endowment and Regional Trust of San Mateo County, Attn:

Executive Director, 2905 S. El Camino Real, San Mateo, CA 94403. 9 ATTACHMENT 2
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ATTACHMENT 1
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ATTACHMENT 1

BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Statements of Net Position
June 30, 2023 and 2022
2023 2022
Assets
Cash and investments $ 10,130,466 $ 8,053,608
Receivables, net:

Interest 1,311,665 1,118,907
Loans 9,809,489 10,512,573
Accounts 162,343 533
Restricted assets:

Temporarily restricted:

Cash and cash equivalents 414,960 411,932
Total Assets 21,828,923 20,097,553
Liabilities
Accounts payable 62,390 47,902
Long-term liabilities:

San Mateo County Measure K loan 4,620,000 4,620,000
Total Liabilities 4,682,390 4,667,902
Net Position
Restricted for:

Home Buyer Assistance Loan Program -
pledge account 414,960 411,932
Unrestricted 16,731,573 15,017,719
Total Net Position $ 17,146,533 $ 15,429,651
Governmental Activities
The notes to the financial statements are an integral part of this statement. 13 ATTACHMENT 2
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ATTACHMENT 1
2023 2022
Expenses
General management and administrative support 669,638 $ 524,837 Legal services 11,274 24,816
Interest on long-term debt 83,212 44,960
Miscellaneous 135 -
Total Expenses 764,259 594,613
Program Revenues
Operating grants and contributions:

Member agencies 236,286 236,280
Donors 1,823,882 4,165,177
Charges for Services 4,800 23,078
Total Program Revenues 2,064,968 4,424,535
Net Program Revenue (Expenses) 1,300,709 3,829,922
General Revenues
Investment earnings 416,173 58,889
PPP Loan forgiveness 0 62,500
Total General Revenues 416,173 121,389
Change in Net Positions 1,716,882 3,951,311
Net Positions - beginning 15,429,651 11,478,340
Net Positions - ending $ 17,146,533 $ 15,429,651
Housing Endowment and Regional Trust of San Mateo County Statements of Activities
For the Years Ended June 30, 2023 and 2022
Governmental Activities
The notes to the financial statements are an integral part of this statement. 14 ATTACHMENT 2
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ATTACHMENT 1

BASIC FINANCIAL STATEMENTS
Fund Financial Statements
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ATTACHMENT 1
2023 2022
Assets
Cash and investments $ 10,130,466 $ 8,053,608
Receivables, net:

Interest 1,311,665 1,118,907
Loans 9,809,489 10,512,573
Accounts 162,343 533
Cash - restricted 414,960 411,932
Total Assets $ 21,828,923 $ 20,097,553
Liabilities, Deferred Inflows of
Resources, and Fund Balance
Liabilities
Accounts payable $ 62,390 $ 47,902
Total Liabilities 62,390 47,902
Deferred Inflows of Resources
Unavailable revenues 1,311,665 1,118,907
Total Deferred Inflows of Resources 1,311,665 1,118,907 Fund Balance
Nonspendable 9,809,489 10,512,573
Restricted 414,960 411,932
Unassigned 10,230,419 8,006,239
Total Fund Balance 20,454,868 18,930,744
Total Liabilities, Deferred Inflows of Resources, and Fund Balance $ 21,828,923 $ 20,097,553 Reconciliation of Fund Balance Sheets to the Statements of Net Position:

Total Fund Balance - Governmental Fund $ 20,454,868 $ 18,930,744 Long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the fund
Interest receivable 1,311,665 1,118,907
Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Fund Balance Sheet Paycheck Protection Program loan - -
County of San Mateo-Measure-K loan (4,620,000) (4,620,000) Net position of governmental activities $ 17,146,533 $ 15,429,651 Housing Endowment and Regional Trust of San Mateo County Balance Sheets - Governmental Fund
June 30, 2023 and 2022
The notes to the financial statements are an integral part of this statement. 17 ATTACHMENT 2
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Statements of Revenues, Expenditures, and Changes in Fund Balance For the Years Ended June 30, 2023 and 2022
2023 2022
Revenues
Member agency contributions $ 236,286 $ 236,280
Donor contributions 1,823,882 4,165,177
Charges for services 4,800 23,078
Investment earnings 223,415 87,819
Total Revenues 2,288,383 4,512,354
Expenditures
General management and administrative support 669,638 524,837 Legal services 11,274 24,816
Miscellaneous 135 -
Debt service:

Interest and fiscal charges 83,212 44,960
Total Expenditures 764,259 594,613
Excess (Deficit) of Revenues Over Expenditures 1,524,124 3,917,741 Other Financing Sources (Uses)
Loan proceeds - 1,120,000
Total Other Financing Sources (Uses) - 1,120,000
Net Change in Fund Balance 1,524,124 5,037,741
Fund Balance - Beginning 18,930,744 13,893,003
Fund Balance - Ending $ 20,454,868 $ 18,930,744
Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund Balance of Governmental Fund to the Statements of Activities (page 14)
Net change in fund balance - governmental fund $ 1,524,124 $ 5,037,741 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 192,758 (28,930) Gain due to the PPP loan forgiveness recognized as revenue in the government-wide statement of activities, but no long-term debt transactions recorded in the governmental fund statement of revenues, expenditures, and changes in fund balance - 62,500
Loan proceeds provided current financial resources to governmental funds, but increased long-term liabilities in the government-wide statemem of net position. - (1,120,000)
Change in net positions of governmental activities $ 1,716,882 $ 3,951,311 The notes to the financial statements are an integral part of this statement. 18 ATTACHMENT 2
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ATTACHMENT 1
Notes to the Basic Financial Statements
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Reporting Entity
On February 26, 2002, the County of San Mateo (County) approved establishment of a housing trust fund for the County and set aside $3 Million from reserves to be used as the initial capitalization for the fund.

A Joint Powers Agreement (Agreement) between the County and certain cities and towns within the County (Member Agencies) established the Housing Endowment and Regional Trust (HEART) in 2003 under the Joint Exercise of Powers Act per California Government Code Sections 6500 et seq. The Agreement was in effect at least until March 30, 2013 and can be terminated thereafter according to the terms specified in the Agreement. HEART’s general purpose is to support and generate funding that will result in permanent additions to workforce housing needs in San Mateo County. HEART obtained a determination from the Internal Revenue Service of its tax-exempt status and classification as a public charity under Section 501(c)(3) of the Internal Revenue Code (Code), effective January 8, 2008.

Contributions to HEART are tax deductible under Section 170 of the Code.

HEART is an entity separate from each participating entity and is under the direction of a Board of Directors (Board). The Board is comprised of 11 elected officials from the County and Member Agencies and 10 at-large members who are not publicly elected officials. The Board appoints a managing agent who is responsible for the day-to-day administration of HEART under its direction.

The County also made an initial allocation of $75,000 for administrative costs in addition to the $3 Million initial capitalization. HEART received $2.075 Million in fiscal year 2004 and the remaining $1 Million was paid in equal installments from fiscal years 2005 through 2009. The Member Agencies support HEART by contributing annual dues. The dues were assessed annually through fiscal year 2009 based upon Member Agency’s population information used by City/County Association of Governments of San Mateo County (C/CAG). The dues remained fixed from fiscal years 2009 through 2011. The dues were reduced by 10% annually in FY 2012, and remained fixed in FY 2014 through FY 2023 at the lower rate.

Monies allocated and disbursed to HEART can be expended only for purposes authorized under the Agreement.
(b) Measurement Focus, Basis of accounting, and Financial Statement Presentation Under the new financial reporting model, governments are required to present government-wide and fund financial statements along with reconciliation from the fund financial statements to the governmentwide statements. The government-wide financial statements are reported on a basis of accounting similar to a commercial enterprise, which is different from the traditional basis of accounting used for the fund financial statements.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred regardless of when the related cash flows take place. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 21 ATTACHMENT 2
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (b) Measurement Focus, Basis of accounting, and Financial Statement Presentation (continued) Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues from reimbursement type programs are considered to be available when they are collectible within two months of the end of the current fiscal period in order to properly match revenues with related expenditures. Expenditures are recognized in the accounting period in which the liability is incurred.

Cash and Cash Equivalents: Cash and cash equivalents include all monies held in banks, highly liquid investments with maturities of less than three months and cash held in the San Mateo County Investment Pool (County Pool). A portion of the cash balance is pooled with other funds of the County to earn a higher rate of return than could be earned by investing the funds individually. HEART considers its equity in the County’s investment pool to be cash equivalents.

Receivables: All receivables are reported at their gross value and, where appropriate, are reduced by the estimated portion that is expected to be uncollectible.

Restricted Assets: Amounts maintained in separate bank accounts are classified as restricted assets on the balance sheet because uses of the funds are externally restricted by the lending agencies to maintain a minimum balance in the Pledge Account for financing eligible housing developers and homeowners.

Long-term Obligations: Long-term debts are reported as liabilities in the government-wide financial statements. In the fund financial statements, governmental fund types report the face amount of the debt issued as other financing sources and interest and principal payments made in the current period are reported as debt service expenditures.
(c) Use of Estimates
The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results based on subsequent events could differ from those estimates.
(d) Budgetary Information
HEART adopts an annual budget that can be amended throughout the year. The basis used to prepare the budget is the same as the basis used to reflect actual revenues and expenditures except that unrealized gains and losses are not included in the budget. See Note 1 of the notes to the required supplementary information for detail.
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) New Pronouncements
In fiscal year 2022-23, HEART adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements:
 GASB Statement No. 91, Conduit Debt Obligations – The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The requirements of this statement did not apply to the HEART for the current fiscal year.
 GASB Statement 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements – The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP in an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. The requirements of this statement did not apply to the HEART for the current fiscal year.  GASB Statement No. 96, Subscription-based Information Technology Arrangements – This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset – an intangible asset – and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The requirements of this Statement did not apply to the HEART for the current fiscal year.
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

2. CASH AND INVESTMENTS
(a) Cash and Investments
As of June 30, 2023 and 2022, HEART’s cash and investments consisted of:

Cash Deposits
The carrying amount of HEART’s cash deposits were a total of $1,921,961. Bank balances before reconciling items were a positive amount of $1,921,961 as of June 30, 2023. The carrying amount of HEART’s cash deposits were a total of $286,210. Bank balances before reconciling items were a positive amount of $292,991 as of June 30, 2022.

The California Government Code requires California banks and savings and loan associations to secure HEART’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in HEART’s name. The fair value of pledged securities must equal at least 110% of HEART’s cash deposits. California law also allows institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of the total cash deposits. HEART’s cash deposit was fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The remaining amount was not collateralized San Mateo County Investment Pool
Investment in the County Pool is reported at fair value. The change in fair value for the year is recorded as unrealized gain or loss and reported as part of investment earnings. Fair value is based on information provided by the County Treasurer. The fair value in HEART's investment in the County Pool as of June 30, 2023 and 2022 was $8,208,505 and $7,764,308 respectively. The fair value factor of 0.9715 and

0.9688 was used to calculate the fair value of the investments in the County Pool for fiscal year 2023 and fiscal year 2022.

HEART does not have a formally adopted investment policy.

FY 22-23 FY 21-22
Cash and investments:

Cash on hand $ - $ 3,090
Wells Fargo Checking and Savings Accounts 1,833,816 47,343 Meriwest Committed Account 88,145 238,867
San Mateo County Investment Pool 8,208,505 7,764,308
Total unrestricted cash and investments 10,130,466 8,053,608 Meriwest Restricted Account 414,960 411,932
Total cash and investments $ 10,545,426 $ 8,465,540
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

2. CASH AND INVESTMENTS (CONTINUED)
(b) Risk Disclosures
Interest Risk: Interest rate risk is the market value fluctuation due to overall changes in the interest rates.

It is mitigated by limiting the average maturity of HEART’s portfolio.

Investments held in HEART grouped by maturity date as of June 30, 2023 and 2022 are shown below:

Credit Risk: Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of an issuer to repay its debt. As of June 30, 2023, HEART’s deposits and investments were rated as follow:

Custodial Credit Risk: Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside.

3. RECEIVABLES
(a) Interest Receivable
The interest receivable balance reported at June 30, 2023 and 2022 of $1,311,665 and $1,118,907 respectively represent uncollected interest on loans receivable and fourth quarter interest due from the County Treasurer on investments made by HEART in the County Pool.

FY2023
Investment Type Total 1 year or Less 1 - 2 years 2- 3 years San Mateo County Investment Pool $ 8,208,505 $ 8,208,505 $ - $ - Total Investments $ 8,208,505 $ 8,208,505 $ - $ -
FY2022
Investment Type Total 1 year or Less 1 - 2 years 2- 3 years San Mateo County Investment Pool $ 7,764,308 $ 7,764,308 $ - $ - Total Investments $ 7,764,308 $ 7,764,308 $ - $ -
Investment Maturities (in years)
Investment Maturities (in years)
Moody's S&P % of Portfolio Moody's S&P % of Portfolio
San Mateo County Investment Pool Not Rated Not Rated 100% Not Rated Not Rated 100% Total 100% 100%
FY2023 Credit Quality Ratings FY2022 Credit Quality Ratings 25 ATTACHMENT 2
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

3. RECEIVABLES (CONTINUED)
(b) Loans Receivable
Loans receivable as of June 30, 2023and 2022 consist of the following:
2023 2022
In September 2006, HEART loaned $1,730,000 of program funds to The Crossings Phase II, L.P. for the development of the 113-unit The Village at the Crossing project in San Bruno, CA, which will provide housing for very-low and extremely-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy and bears interest at a rate of 3% per annum. The Certificate of Occupancy was issued on January 10, 2008. $ 1,709,866 $ 1,721,724 In June 2006, HEART signed a loan agreement with Hillcrest Senior Housing Corporation (HSHC) for $510,000 to assist with construction financing of the 39-unit Hillcrest Gardens project in Daly City, CA, which will provide housing for very-low and extremely-low income seniors. The loan has a term of 55 years from the issuance of the Certificate of Occupancy and/or Notice of Completion for the development, whichever is earlier, and bears interest at a rate of 3% per annum. The Notice of Completion was issued on December 11, 2008.
510,000 510,000
In February 2015, HEART signed a loan agreement with Habitat for Humanity for $500,000 to assist in the acquisition of the land and improvements located at 612 Jefferson Avenue, Redwood City (“Property”) to build a multifamily development. The loan is secured by a Deed of Trust recorded against the property. The loan has a term of 5 years with an option to extending for a term of one year and bears interest at a rate 0% for the first five years and at a rate of 3% if the borrower fails to achieve the project completion milestone at maturity.
487,500 500,000
In December 2007, HEART signed a loan agreement with Trestle Glen Associates for $1,760,000 to assist with the development of a 119-unit rental housing project in Colma, CA, which will provide housing for very-low and extremely-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy and/or Notice of Completion for the development, whichever is later, and bears interest at a rate of 3% per annum. The Certificate of Occupancy was issued on December 30, 2009. 1,760,000 1,760,000 In October 2015, Bridge Housing Ventures assumed National Church Residences loan including accrued interest for the amount of $542,123, to assist with the one hundred units of rental housing affordable to low-income households, commonly known as Ocean View Senior Apartments, located at 555 Crespi Drive in Pacifica, California. The loan has a term of 57 years from the date of the modification agreement, which bears interest at a rate of 3% per annum commencing on October 16, 2016. 542,123 542,123 Sub-total carried forward $ 5,009,489 $ 5,033,847
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

3. RECEIVABLES (CONTINUED)
(b) Loans Receivable
2023 2022
Sub-total carried forward $ 5,009,489 $ 5,033,847
In March 2011, HEART signed a loan agreement with Mid-Peninsula South City, L.P. for $600,000, which was funded by the Genetech Foundation South Francisco Fund to assist with the development of 62-units of a 109-unit rental housing project in South San Francisco, CA, which will provide housing for low and very-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy, which evidences project completion and bears interest at a rate of 3% per annum commencing upon project completion. The Certificate of Occupancy was issued on October 19, 2012. 600,000 600,000
In March 2011, HEART signed a loan agreement with Mid-Peninsula South City II, L.P. for $400,000, which was funded by the Genetech Foundation South Francisco Fund to assist with the development of 47-units of a 109-unit rental housing project in South San Francisco, CA, which will provide housing for low and very-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy, which evidences project completion and bears interest at a rate of 3% per annum commencing upon project completion. The Certificate of Occupancy was issued on October 19, 2012. 400,000 400,000
In September 2021, HEART signed a loan agreement with Nugent Square Partners, L.P. for $850,000 to rehabilitate an existing affordable housind development in need of emergency repairs. Nugent Square apartments is located in the City of East Palo Alto and consists of 32 units affordable to very low- and extremely low-income households. The loan has a term of two years and bears interest at a rate of 3% commencing on October 19, 2021. - 678,726
In December 2021, HEART signed a Deveopment Loan Agreement with MP Downtown San Mateo Associates, L.P. to provide $3,800,000 for the development of 225 rental homes for extremely low- very low- and low-income individuals and families. The project is located in the City of San Mateo. The loan has a term of 55 years from and bears an interest rate of 3% commencing in March 2022. 3,800,000 3,800,000 Total Loans Receivable $ 9,809,489 $ 10,512,573
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

4. ACCOUNTS PAYABLE
Accounts payable comprises of the following:

5. NON-CURRENT LIABILITIES
The following is summary of non-current liability activity of HEART:

San Mateo County: Measure-K loan
On August 1, 2017 HEART entered into a loan agreement with the County of San Mateo for an amount of $5,000,000 with a maturity date of July 31, 2024. Interest rate will be paid annually based on the amount of interest that the loan would have earned had it been invested in the San Mateo County Pooled Investment rate starting twelve months from the date of the initial disbursement. The proceeds of the loan will to be used to make predevelopment, acquisition, construction and bridge loans that are consistent with the terms of HEART’s Quick Start Loan Program. As of June 30, 2023 HEART drawn an amount of $4,620,000 from the total loan agreement of $5,000,000. 2023 2022
Payable for contractor service $ 4,598 $ 12,039
Accrued payroll 57,792 35,863
Total Accounts payable $ 62,390 $ 47,902
Balance at Balance at
July 1, 2022 Additions Deletions June 30, 2023
San Mateo County:Measure-K $ 4,620,000 $ - $ - $ 4,620,000 Total $ 4,620,000 $ - $ - $ 4,620,000
Balance at Balance at
July 1, 2021 Additions Deletions June 30, 2022
San Mateo County:Measure-K $ 3,500,000 $ 1,120,000 $ - $ 4,620,000 Paycheck Protection Program loan:

Loan # 9780199-02 62,500 - (62,500) -
Total $ 3,562,500 $ 1,120,000 $ (62,500) $ 4,620,000
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

6. REVENUES
(a) Operating Grants and Contributions
Operating grants and contributions consist of the following:

Member Agencies Dues
Member Agencies are billed annually for dues to cover administrative expenses.

Donors
Other operating grants and contributions include contributions from private donors. (b) Charges for Services
Charges for services are loan processing fees collected from home buyers upon close of escrow on each home loan.
(c) Investment Earnings
Investment earnings reported in the government fund statements of revenues, expenditures, and changes in fund balance comprise of quarterly interest received from the County Treasurer on investments made by HEART in the County Pool and interest collected from developers on cumulative interest receivable accrued. Interest is recorded in the year it is earned and is available to pay current liabilities.

Investment earnings reported in the government-wide statements of activities includes earnings from the County investments noted above plus interest earned in the current year on loans made to developers.

7. FUND BALANCES / NET POSITION
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which HEART is bound to honor constraints on the specific purpose for which amount in the fund can be spent. As of June 30, 2023 and 2022, fund balance for the governmental fund consists of the following classifications respectively:
(a) Nonspendable Fund Balance – includes amounts that cannot be spent because they are not in spendable form, such as prepaid items and loans receivable. (b) Restricted Fund Balance – includes amounts that can be spent only for specific purposes stipulated by external resources providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. (c) Unassigned Fund Balance – is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications.

In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted and then unassigned. 29 ATTACHMENT 2
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B.

ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023 AND 2022

7. FUND BALANCES / NET POSITION (CONTINUED)
At fiscal year-end, fund balance reported on the balance sheets on page 17 includes:

The amount shown as restricted above is also reported as restricted net position on the statement of net positions on page 13.

8. RISK MANAGEMENT
HEART is exposed to various risks of losses related to assets having a current or future benefit to HEART.

HEART has insurance coverage provided by the Hartford. In addition, HEART has special excess liability insurance coverage provided as part of the County's insurance coverage. The existing insurance policies are current as of the issuance of this report. Under an agreement with the County, the Department of Housing (DOH) of San Mateo County provides fiscal and program services to HEART. Agents of the DOH are covered by the County’s insurance provider. The County Counsel provides legal representation for any claims or litigation of HEART under a contract. For the years ended June 30, 2023 and 2022, the annual amount contracted with County Counsel for legal representation was $9,773 and $24,816 respectively.
2023 2022
Nonspendable $ 9,809,489 $ 10,512,573
Restricted:

Home Buyer Assistance Loan Program - pledge account
see Note 2(a) 414,960 411,932
Unassigned 10,230,419 8,006,239
Total Fund Balance $ 20,454,868 $ 18,930,744
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ATTACHMENT 1

REQUIRED SUPPLEMENTARY INFORMATION
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ATTACHMENT 1
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ATTACHMENT 1
Actual
Amount Variance with
Budgeted Budgeted Budgetary Final Budget
Amount Amount Basis Positive
Original Final (Note 1) (Negative)
Revenues
Member Agency contributions $ 236,280 $ 236,280 $ 236,286 $ 6 Other contributions 152,000 165,000 1,823,882 1,658,882 Investment earnings 111,996 111,996 138,219 26,223
Loan proceeds - interest 123,429 103,572 75,953 (27,619) Charges for services and other 658,100 182,000 4,800 (177,200) administrative support 1,281,805 798,848 2,279,140 1,480,292 Expenditures
General management and
administrative support 800,705 688,381 669,638 18,743
Legal services 25,000 15,000 11,274 3,726
Debt services
Interest and fiscal charges 95,467 95,467 83,212 12,255 Contingency 360,633 - 135 (135)
Total Expenditures 1,281,805 798,848 764,259 34,589
Net Change in Fund Balance $ - $ - 1,514,881 1,514,881
Fund Balance - beginning 19,180,792
Fund Balance - ending $ 20,695,673
Housing Endowment and Regional Trust of San Mateo County Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2023
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023 and 2022

1. BUDGETS, BUDGETARY PROCESS, AND ENCUMBRANCES
HEART uses two funding sources to manage operations: Administrative Funds and Program Funds. The Board adopts an annual operating budget, which can be amended by the Board throughout the year. Actual revenues and expenditures presented reflect activity in both funds during the year. As discussed in Note 1(d) of the notes to the basic financial statements, the basis used to prepare the budget is the same as the basis used to reflect actual revenues and expenditures, except for unrealized gains and losses under GASB 31. The financial statements record unrealized gains and losses as required by Generally Accepted Accounting Principles (GAAP). Adjustments were made to certain budgeted accounts to reflect changes made in financial statement presentation.

HEART uses an encumbrance system to assist in controlling expenditures. Purchase orders, contracts, and other commitments for the expenditures of monies are recorded under this system in order to reserve applicable appropriations. Any encumbrances outstanding at year-end are recorded as reservations of fund balance as they do not constitute expenditures or liabilities.

The actual net change in fund balance under the budgetary basis on page 33 is reconciled to the change in fund balance under GAAP on page 18 as follows:

Explanation of difference between budgetary basis and GAAP basis:

FY 22-23
Ca Net Change in Fund Balance - budgetary basis $ 1,514,881 sh on hand - Net unrealized loss on cash in County Investment Pool
under GASB 31 9,243
Change in Fund Balance - GAAP basis $ 1,524,124
Fund Balance - budgetary basis $ 20,695,673
Unrealized loss on cash in County Investment Pool
under GASB 31 as of June 30, 2023 (240,805)
Fund Balance - GAAP basis $ 20,454,868
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ATTACHMENT 1

SUPPLEMENTARY INFORMATION
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ATTACHMENT 1
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ATTACHMENT 1
Program Administrative
Funds Funds Total
Revenues
Member agency contributions $ - $ 236,286 $ 236,286
Donor contributions 1,714,318 109,564 1,823,882
Investment earnings 59,089 79,130 138,219
Loan proceeds interest 17,130 58,823 75,953
Loan origination fees 4,800 - 4,800
Total Revenues 1,795,337 483,803 2,279,140
Expenditures
General management and
administrative support 490,081 179,557 669,638
Legal services 9,724 1,550 11,274
Debt services
Interest and fiscal charges 83,212 - 83,212
Total Expenditures 583,017 181,242 764,259
Net Change in Fund Balance 1,212,320 302,561 1,514,881
Fund Balance - beginning 18,141,589 1,039,203 19,180,792 Fund Balance - ending $ 19,353,909 $ 1,341,764 $ 20,695,673 required by generally accepted accounting principles.

Housing Endowment and Regional Trust of San Mateo County Status of Funds
For the Year Ended June 30, 2023
Notes:
(1) All income received from investment earnings is categorized to Program Funds (2) The above schedule does not include adjustments made for GASB No. 31 as 37 ATTACHMENT 2
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ATTACHMENT 1
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ATTACHMENT 1

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and major fund of the Housing Endowment and Regional Trust of San Mateo County (HEART) as of and for the years ended June 30, 2023 and 2022, and the related notes to the financial statements, which collectively comprise HEART’s basic financial statements, and have issued our report thereon dated March 4, 2024.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered HEART’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of HEART’s internal control. Accordingly, we do not express an opinion on the effectiveness of HEART’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 39 ATTACHMENT 2
129
B.

ATTACHMENT 1
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether HEART’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Badawi & Associates, CPAs
Berkeley, California
March 4, 2024
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B.

ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST

OF SAN MATEO COUNTY
Financial Statements and
Independent Auditors’ Report
June 30, 2024 and 2023
ATTACHMENT 2
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B.

ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST

OF SAN MATEO COUNTY
JUNE 30, 2024 and 2023

TABLE OF CONTENTS
Independent Auditors’ Report 1 - 4
Management’s Discussion and Analysis 5 - 10
Basic Financial Statements:

Government-Wide Financial Statements
Statements of Net Positions 13
Statements of Activities 14
Fund Financial Statements
Balance Sheets – governmental fund 17
Statements of Revenues, Expenditures and
Changes in Fund Balance – governmental fund 18
Reconciliation of the Statements of Revenues,
Expenditures and Changes in Fund Balance of
Governmental Fund to the Statements of Activities 18
Notes to the Financial Statements 21 - 30
Required Supplementary Information:

Schedule of Revenues, Expenditures and
Changes in Fund Balance – Budget and Actual
Governmental Fund 33
Notes to the Required Supplementary Information 34
Supplementary Information:

Status of Funds 37
Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................. 39-41 ATTACHMENT 2
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ATTACHMENT 1
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the Housing Endowment and Regional Trust of San Mateo County, California (HEART), as of and for the years ended June 30, 2024 and 2023, and the related notes to the financial statements, which collectively comprise HEART’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of HEART, as of June 30, 2024 and 2023, and the respective changes in financial position thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of HEART and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements HEART’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about HEART’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 1 ATTACHMENT 2
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B.

ATTACHMENT 1
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of HEART’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about HEART’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
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B.

ATTACHMENT 1
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 5-9 and 33-34 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.

We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise HEART’s basic financial statements. The status of funds schedule is presented for purposes of additional analysis and is not a required part of the basic financial statements.

The status of funds schedule is the responsibility of management and is derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the status of funds schedule is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 31, 2025 on our consideration of HEART’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering HEART’s internal control over financial reporting and compliance.

Badawi and Associates, CPAs
Emeryville, California
August 31, 2025
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
As management of the Housing Endowment and Regional Trust of San Mateo County (HEART), we offer our readers of HEART’s financial statements this narrative overview and analysis of its financial activities for the fiscal year ended June 30, 2024. We encourage readers to consider the information presented here in conjunction with the basic financial statements and related notes.

Financial Highlights
• HEART’s total net position as of June 30, 2023 amounted to $19,627,530, an increase of $2,480,997 from the prior year. This increase was the result of receiving $1.8 million in grants to assist in the development of affordable housing, an increase of $354,000 in accrued interest, and the balance from operations.

• Consistent with prior years, HEART’s net position primarily made up of $14.5 million in outstanding interest and loan receivables from affordable housing developers. • Cash and cash equivalents are $9.68 million. This amount is largely comprised of $2,000,000 in borrowed funds from the County of San Mateo Measure-K loan, $7,258,787 in HEART Trust Funds, and $421,359 in restricted funds. Of the total $9.68 million in cash and cash equivalents, $8.5 million can only be used to develop or preserve affordable housing. • During the fiscal year HEART made two loans totaling $6 million dollars to support the development of affordable housing. During the year, HEART received one loan repayment in the amount of $3 million.
• Total operating and program revenue for the year amounted to $2,580,071 comprised of $2 million in grants restricted for affordable housing, $236,363 in contributions from member agencies and the balance of $262,225 from loan origination fees and charges to cities for HEART’s City staffing program.

Overview of the Financial Statements
HEART’s basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-Wide Financial Statements
The government-wide financial statements are designed to provide the reader with a broad overview of HEART’s finances, in a manner similar to a private-sector business.

The statements of net positions present information on HEART’s assets and liabilities, with the difference reported as net positions. Over time, increases or decreases in net positions may serve as a useful indicator of whether the financial position of HEART is improving or deteriorating.

The statements of activities report how HEART’s net positions changed during the most recent two fiscal years. Changes in net positions are reported as soon as underlying events occur, regardless of the timing of the related cash flows. Thus, some revenues and expenses reported in this statement may result in cash flows only in future periods. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

The government-wide financial statements can be found on pages 13 and 14 of this report. 5 ATTACHMENT 2
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B.

ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
Fund Financial Statements
A fund is a group of related accounts that is used to control resources that have been segregated for specific activities or objectives. HEART uses fund accounting to ensure compliance with various legal requirements, such as the annually adopted budget. Accordingly, a budgetary comparison schedule has been included in the supplementary information section of the financial statements to demonstrate compliance with budget.

Fund financial statements report essentially the same information as the government-wide financial statements. However, unlike the government-wide financial statements, fund financial statements focus on near-term inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year.

As required by accounting principles, the financial transactions of HEART are accounted for in a Special Revenue Fund, a governmental fund, as monies received by it are legally restricted to specific use. Monies allocated and disbursed to HEART can be expended only for purposes authorized under the Agreement.

The fund financial statements can be found on pages 17 through 18 of this report.

Notes to the Financial Statements
The notes to the financial statements on pages 21 through 30 provide additional information that is essential to the full understanding of the data provided in the government-wide and fund financial statements.

Other information
This report also presents certain required supplementary information concerning compliance with HEART’s annual budget. This information, as well as associated notes, immediately follows the basic financial statements and the accompanying notes.
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
Financial Analysis – Government-Wide Financial Statements Assets
Cash and cash equivalents
Receivables, net:

Interest
Loans
Accounts
Restricted assets:

Temporarily restricted:

Cash and cash equivalents
Total Assets
Liabilities
Accounts payable
Long-term liabilities
San Mateo County Measure-K Loan
Paycheck Protection Program Loan
Total Liabilities
Net Position
Restricted for:

Homebuyer Assistance Loan Program – pledge
account
Unrestricted
Total Net Positions

2024
$ 9,680,146

1,665,692
12,834,489
104,754

421,359
24,706,440

78,910

5,000,000
0 5,078,910

421,359
19,206,171
$ 19,627,530

2023
$ 10,130,466

1,311,665
9,809,489
162,343

414,960
21,828,923

62,390
4,620,000
0 4,620,000

411,960
16,731,573
$ 17,146,533
• HEART’s total assets are $24,706,440, an increase of $2,877,517 from the previous year. This is an increase of 11.6% compared to the prior year. A $1.7 million grant from the California Department of Housing and Community Development and a $1.3 million grant from the City of Daly City are largely responsible for the net $2.9 million asset increase from the previous year. • Cash and cash equivalents decreased from $10.1 million to approximately $9.7 million. HEART experienced large cash inflow and outflows during the fiscal year. This included receiving $3 million in grants, making $6 million in loans, receiving $3 million in loan repayments and drawing down a $380,000 loan from the County of San Mateo. The net effect of these flows and total operations was a net decrease of $450,300 in cash and cash equivalents. • Loans outstanding increased by a net amount of approximately $3 million due to a new loan to CRP The Ridge at Ralston for a development project in the City of Belmont.

• Total liabilities for the current year are $5,078,910. This represents an increase of $458,920 from the previous year. The increase is largely due to drawing $380,000 from HEART’s Measure-K loan from the County of San Mateo, bringing the total loan from the County to $5 million. The remaining 7 ATTACHMENT 2
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
$78,910 in liabilities includes $65,923 in payroll liabilities for accrued vacation and payroll taxes, and $12,987 in accounts payable to consultants and miscellaneous vendors. • Net position of governmental activities is $17,146,533, an increase of $1,716,882, or 11% more compared to the previous fiscal year. The increase in net position was due to a $1.7 million grant from the California Department of Housing and Community Development for the development of Colibri Commons, and affordable housing development in the City of East Palo Alto.

Changes in Net Positions
Changes in Net Positions

Revenues:

Program Revenues:

Operating grants and contributions
Member Agencies
Donors
Charges for Services
Total Program Revenues

Expenses:

General management and admin support
Legal services
Interest on long-term debt
Miscellaneous
Total Expenses
Net Program Revenue
General Revenues – Investment Earnings
Change in Net Positions
Net positions – beginning
Net positions – ending

2024

$ 236,363
2,081,483
262,225
2,580,071
993,913
1,069
92,748
201
1,027,941

1,552,130
928,867

2,480,997

17,146,533
$ 19,627,530

2023

$ 236,286
1,823,882
4,800
2,064,968
669,638
11,274
83,212
135
764,259

1,300,709
416,173

1,716,882

15,429,651
$ 17,146,533
• Total operating and program revenue during the current period was $2,580,071, higher than the prior year’s amount of $2,064,968. This is an increase of 25% or $519,1033. The increase is due to an increase of $257,601 in contributions received and an increase of $257,425 in charges for services.

Grants of $1.7 million the previous year and a similar amount the current year for the Colibri Commons development in East Palo Alto round out the total program revenue. • The $257,601 in contribution noted above is the result of two contributions from the County of San Mateo: a contribution of $85,436 to HEART’s Trust Fund from the County’s impact fees and a contribution of $114,949 from the County to support the HEART’s City Staffing Program. 8 ATTACHMENT 2
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
• The increase of $257,425 in charges for services is largely comprised of $171,000 in fees charged to cities for HEART’s City Staffing Program, and $90,069 in developer loan fees. • Total expenses incurred during the current period amounted to $1,027,941, an increase of $263,682, or 24.5% more, than the previous year. Most of the increase in expenses is due to the addition of more staff at HEART to meet the increased program work load of HEART’s City Staffing Program.

Budgetary Analysis
Total Revenues and Other
Financing Sources
Total Expenditures and Other
Financing Uses
Net Change in Fund Balance
Budgeted Amount
Final
$ 1,336,253
1,446,392
$ (110,139)
x
Actual Amount –
Budgetary Basis
$ 2,966,132
1,027,941
$ 2,318,191
Variance -Positive
(Negative)
$ 1,629,879
418,451
$ 2,428,330
• Actual revenues were higher than budgeted by $1,629,879. While HEART’s individual revenue sources fluctuated and differed from the budgeted amounts, the $1.7 million grant awarded to HEART for affordable housing development was responsible for generating the large positive variance.
• Operating expenses were lower than budgeted by $418,451. Expenses were lower largely due the lower utilization than expected of outside contract and consulting services.

Beyond FY 2024
In 2025 HEART is planning to continue making loans to affordable housing developers with its Trust Fund.

Currently, is planning on making $3 million in loans two affordable housing projects. Additional funds will be available to make more loans throughout 2025. These loans will help HEART achieve its mission of creating more affordable housing units, while increasing its revenue from developer loan origination fees.

Over the next year HEART will also expend significant resources creating new programs to create and preserve affordable housing by financing the acquisition of privately owned, existing apartment buildings and by providing staffing help to cities to assist them with carrying out their affordable housing programs.

HEART has also developed a loan program to help mobile homeowners replace their units with new ones and anticipates making $1 million in loans to mobile homeowners in 2025.

Due to continuing high interest rates, it is likely HEART’s first-time homebuyer down payment loan program, “Opening Doors,” will continue to see low demand for its loans. HEART will continue to present community workshops for first time homebuyers and work with realtors and cities to help buyers prepare for a time when homebuying becomes feasible again.
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Management’s Discussion and Analysis
Requests for Information
This financial report is designed to provide a general overview of HEART’s finances for all those interested.

Questions concerning any of the information provided in this report, or requests for additional financial information should be addressed to Housing Endowment and Regional Trust of San Mateo County, Attn:

Executive Director, 2905 S. El Camino Real, San Mateo, CA 94403. 10 ATTACHMENT 2
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ATTACHMENT 1

BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
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ATTACHMENT 1
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Statements of Net Position
June 30, 2024 and 2023
2024 2023
Assets
Cash and investments $ 9,680,146 $ 10,130,466
Receivables, net:

Interest 1,665,692 1,311,665
Loans 12,834,489 9,809,489
Accounts 104,754 162,343
Restricted assets:

Temporarily restricted:

Cash and cash equivalents 421,359 414,960
Total Assets 24,706,440 21,828,923
Liabilities
Accounts payable 78,910 62,390
Long-term liabilities:

San Mateo County Measure K loan 5,000,000 4,620,000
Total Liabilities 5,078,910 4,682,390
Net Position
Restricted for:

Home Buyer Assistance Loan Program -
pledge account 421,359 414,960
Unrestricted 19,206,171 16,731,573
Total Net Position $ 19,627,530 $ 17,146,533
Governmental Activities
The notes to the financial statements are an integral part of this statement. 13 ATTACHMENT 2
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ATTACHMENT 1
2024 2023
Expenses
General management and administrative support 933,913 $ 669,638 Legal services 1,069 11,274
Interest on long-term debt 92,758 83,212
Miscellaneous 201 135
Total Expenses 1,027,941 764,259
Program Revenues
Operating grants and contributions:

Member agencies 236,363 236,286
Donors 2,081,483 1,823,882
Charges for Services 262,225 4,800
Total Program Revenues 2,580,071 2,064,968
Net Program Revenue (Expenses) 1,552,130 1,300,709
General Revenues
Investment earnings 928,867 416,173
PPP Loan forgiveness - -
Total General Revenues 928,867 416,173
Change in Net Positions 2,480,997 1,716,882
Net Positions - beginning 17,146,533 15,429,651
Net Positions - ending $ 19,627,530 $ 17,146,533
Housing Endowment and Regional Trust of San Mateo County Statements of Activities
For the Years Ended June 30, 2024 and 2023
Governmental Activities
The notes to the financial statements are an integral part of this statement. 14 ATTACHMENT 2
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ATTACHMENT 1

BASIC FINANCIAL STATEMENTS
Fund Financial Statements
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ATTACHMENT 1
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ATTACHMENT 1
2024 2023
Assets
Cash and investments $ 9,680,146 $ 10,130,466
Receivables, net:

Interest 1,665,692 1,311,665
Loans 12,834,489 9,809,489
Accounts 104,754 162,343
Cash - restricted 421,359 414,960
Total Assets $ 24,706,440 $ 21,828,923
Liabilities, Deferred Inflows of
Resources, and Fund Balance
Liabilities
Accounts payable $ 78,910 $ 62,390
Total Liabilities 78,910 62,390
Deferred Inflows of Resources
Unavailable revenues 1,665,692 1,311,665
Total Deferred Inflows of Resources 1,665,692 1,311,665 Fund Balance
Nonspendable 12,834,489 9,809,489
Restricted 421,359 414,960
Unassigned 9,705,990 10,230,419
Total Fund Balance 22,961,838 20,454,868
Total Liabilities, Deferred Inflows of Resources, and Fund Balance $ 24,706,440 $ 21,828,923 Reconciliation of Fund Balance Sheets to the Statements of Net Position:

Total Fund Balance - Governmental Fund $ 22,961,838 $ 20,454,868 Long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the fund
Interest receivable 1,665,692 1,311,665
Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Fund Balance Sheet County of San Mateo-Measure-K loan (5,000,000) (4,620,000) Net position of governmental activities $ 19,627,530 $ 17,146,533 Housing Endowment and Regional Trust of San Mateo County Balance Sheets - Governmental Fund
June 30, 2024 and 2023
The notes to the financial statements are an integral part of this statement. 17 ATTACHMENT 2
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ATTACHMENT 1
Housing Endowment and Regional Trust of San Mateo County Statements of Revenues, Expenditures, and Changes in Fund Balance For the Years Ended June 30, 2024 and 2023
2024 2023
Revenues
Member agency contributions $ 236,363 $ 236,286
Donor contributions 2,081,483 1,823,882
Charges for services 262,225 4,800
Investment earnings 574,840 223,415
Total Revenues 3,154,911 2,288,383
Expenditures
General management and administrative support 933,913 669,638 Legal services 1,069 11,274
Miscellaneous 201 135
Debt service:

Interest and fiscal charges 92,758 83,212
Total Expenditures 1,027,941 764,259
Excess (Deficit) of Revenues Over Expenditures 2,126,970 1,524,124 Other Financing Sources (Uses)
Loan proceeds 380,000 -
Total Other Financing Sources (Uses) 380,000 -
Net Change in Fund Balance 2,506,970 1,524,124
Fund Balance - Beginning 20,454,868 18,930,744
Fund Balance - Ending $ 22,961,838 $ 20,454,868
Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund Balance of Governmental Fund to the Statements of Activities (page 14)
Net change in fund balance - governmental fund $ 2,506,970 $ 1,524,124 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 354,027 192,758 Loan proceeds provided current financial resources to governmental funds, but increased long-term liabilities in the government-wide statemem of net position. (380,000) -
Change in net positions of governmental activities $ 2,480,997 $ 1,716,882 The notes to the financial statements are an integral part of this statement. 18 ATTACHMENT 2
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ATTACHMENT 1
Notes to the Basic Financial Statements
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ATTACHMENT 1
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(b) Reporting Entity
On February 26, 2002, the County of San Mateo (County) approved establishment of a housing trust fund for the County and set aside $3 Million from reserves to be used as the initial capitalization for the fund.

A Joint Powers Agreement (Agreement) between the County and certain cities and towns within the County (Member Agencies) established the Housing Endowment and Regional Trust (HEART) in 2003 under the Joint Exercise of Powers Act per California Government Code Sections 6500 et seq. The Agreement was in effect at least until March 30, 2013 and can be terminated thereafter according to the terms specified in the Agreement. HEART’s general purpose is to support and generate funding that will result in permanent additions to workforce housing needs in San Mateo County. HEART obtained a determination from the Internal Revenue Service of its tax-exempt status and classification as a public charity under Section 501(c)(3) of the Internal Revenue Code (Code), effective January 8, 2008.

Contributions to HEART are tax deductible under Section 170 of the Code.

HEART is an entity separate from each participating entity and is under the direction of a Board of Directors (Board). The Board is comprised of 11 elected officials from the County and Member Agencies and 10 at-large members who are not publicly elected officials. The Board appoints a managing agent who is responsible for the day-to-day administration of HEART under its direction.

The County also made an initial allocation of $75,000 for administrative costs in addition to the $3 Million initial capitalization. HEART received $2.075 Million in fiscal year 2004 and the remaining $1 Million was paid in equal installments from fiscal years 2005 through 2009. The Member Agencies support HEART by contributing annual dues. The dues were assessed annually through fiscal year 2009 based upon Member Agency’s population information used by City/County Association of Governments of San Mateo County (C/CAG). The dues remained fixed from fiscal years 2009 through 2011. The dues were reduced by 10% annually in FY 2012, and remained fixed in FY 2014 through FY 2024 at the lower rate.

Monies allocated and disbursed to HEART can be expended only for purposes authorized under the Agreement.
(c) Measurement Focus, Basis of accounting, and Financial Statement Presentation Under the new financial reporting model, governments are required to present government-wide and fund financial statements along with reconciliation from the fund financial statements to the governmentwide statements. The government-wide financial statements are reported on a basis of accounting similar to a commercial enterprise, which is different from the traditional basis of accounting used for the fund financial statements.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred regardless of when the related cash flows take place. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 21 ATTACHMENT 2
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Measurement Focus, Basis of accounting, and Financial Statement Presentation (continued) Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized as soon as they are both measurable and available. Revenues are considered available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues from reimbursement type programs are considered to be available when they are collectible within two months of the end of the current fiscal period in order to properly match revenues with related expenditures. Expenditures are recognized in the accounting period in which the liability is incurred.

Cash and Cash Equivalents: Cash and cash equivalents include all monies held in banks, highly liquid investments with maturities of less than three months and cash held in the San Mateo County Investment Pool (County Pool). A portion of the cash balance is pooled with other funds of the County to earn a higher rate of return than could be earned by investing the funds individually. HEART considers its equity in the County’s investment pool to be cash equivalents.

Receivables: All receivables are reported at their gross value and, where appropriate, are reduced by the estimated portion that is expected to be uncollectible.

Restricted Assets: Amounts maintained in separate bank accounts are classified as restricted assets on the balance sheet because uses of the funds are externally restricted by the lending agencies to maintain a minimum balance in the Pledge Account for financing eligible housing developers and homeowners.

Long-term Obligations: Long-term debts are reported as liabilities in the government-wide financial statements. In the fund financial statements, governmental fund types report the face amount of the debt issued as other financing sources and interest and principal payments made in the current period are reported as debt service expenditures.
(d) Use of Estimates
The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results based on subsequent events could differ from those estimates.
(e) Budgetary Information
HEART adopts an annual budget that can be amended throughout the year. The basis used to prepare the budget is the same as the basis used to reflect actual revenues and expenditures except that unrealized gains and losses are not included in the budget. See Note 1 of the notes to the required supplementary information for detail.
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (f) New Pronouncements
In fiscal year 2022-23, HEART adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements:
 GASB Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62 – The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability.

2. CASH AND INVESTMENTS
(a) Cash and Investments
As of June 30, 2024 and 2023, HEART’s cash and investments consisted of:

Cash Deposits
The carrying amount of HEART’s cash deposits were a total of $3,752,129. Bank balances before reconciling items were a positive amount of $3,752,129 as of June 30, 2024. The carrying amount of HEART’s cash deposits were a total of $3,752,129. Bank balances before reconciling items were a positive amount of $3,752,129 as of June 30, 2023.

The California Government Code requires California banks and savings and loan associations to secure HEART’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in HEART’s name. The fair value of pledged securities must equal at least 110% of HEART’s cash deposits. California law also allows institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of the total cash deposits. HEART’s cash deposit was fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The remaining amount was not collateralized FY 23-24 FY 22-23
Cash and investments:

Cash on hand $ - $ -
Wells Fargo Checking and Savings Accounts 3,501,846 1,833,816 Meriwest Committed Account 250,283 88,145
San Mateo County Investment Pool 5,928,017 8,208,505
Total unrestricted cash and investments 9,680,146 10,130,466 Meriwest Restricted Account 421,359 414,960
Total cash and investments $ 10,101,505 $ 10,545,426
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023

2. CASH AND INVESTMENTS (CONTINUED)
(a) Cash and Investments, Continued
San Mateo County Investment Pool
Investment in the County Pool is reported at fair value. The change in fair value for the year is recorded as unrealized gain or loss and reported as part of investment earnings. Fair value is based on information provided by the County Treasurer. The fair value in HEART's investment in the County Pool as of June 30, 2024 and 2023 was $5,928,017 and $8,208,505 respectively. The fair value factor of 0.9913 and

0.9715 was used to calculate the fair value of the investments in the County Pool for fiscal year 2024 and fiscal year June 30, 2023.

HEART does not have a formally adopted investment policy. (b) Risk Disclosures
Interest Risk: Interest rate risk is the market value fluctuation due to overall changes in the interest rates.

It is mitigated by limiting the average maturity of HEART’s portfolio. Investments held in HEART grouped by maturity date as of June 30, 2024 and 2023 are shown below:

Credit Risk: Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of an issuer to repay its debt. As of June 30, 2024, HEART’s deposits and investments were rated as follow:

Custodial Credit Risk: Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside.

FY2024
Investment Type Total 1 year or Less 1 - 2 years 2- 3 years San Mateo County Investment Pool $ 5,928,017 $ 5,928,017 -$ -$ Total Investments $ 5,928,017 $ 5,928,017 -$ -$
FY2023
Investment Type Total 1 year or Less 1 - 2 years 2- 3 years San Mateo County Investment Pool $ 8,208,505 $ 8,208,505 -$ -$ Total Investments $ 8,208,505 $ 8,208,505 -$ -$
Investment Maturities (in years)
Investment Maturities (in years)
Moody's S&P % of Portfolio Moody's S&P % of Portfolio
San Mateo County Investment Pool Not Rated Not Rated 100% Not Rated Not Rated 100% Total 100% 100%
FY2024Credit Quality Ratings FY2023 Credit Quality Ratings 24 ATTACHMENT 2
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023

3. RECEIVABLES
(a) Interest Receivable
The interest receivable balance reported at June 30, 2024 and 2023 of $1,665,692 and $1,311,665 respectively represent uncollected interest on loans receivable and fourth quarter interest due from the County Treasurer on investments made by HEART in the County Pool. (b) Loans Receivable
Loans receivable as of June 30, 2024and 2023 consist of the following:
2024 2023
In September 2006, HEART loaned $1,730,000 of program funds to The Crossings Phase II, L.P. for the development of the 113-unit The Village at the Crossing project in San Bruno, CA, which will provide housing for very-low and extremely-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy and bears interest at a rate of 3% per annum. The Certificate of Occupancy was issued on January 10, 2008. $ 1,709,866 $ 1,709,866 In June 2006, HEART signed a loan agreement with Hillcrest Senior Housing Corporation (HSHC) for $510,000 to assist with construction financing of the 39-unit Hillcrest Gardens project in Daly City, CA, which will provide housing for very-low and extremely-low income seniors. The loan has a term of 55 years from the issuance of the Certificate of Occupancy and/or Notice of Completion for the development, whichever is earlier, and bears interest at a rate of 3% per annum. The Notice of Completion was issued on December 11, 2008.
510,000 510,000
In February 2015, HEART signed a loan agreement with Habitat for Humanity for $500,000 to assist in the acquisition of the land and improvements located at 612 Jefferson Avenue, Redwood City (“Property”) to build a multifamily development. The loan is secured by a Deed of Trust recorded against the property. The loan has a term of 5 years with an option to extending for a term of one year and bears interest at a rate 0% for the first five years and at a rate of 3% if the borrower fails to achieve the project completion milestone at maturity.
462,500 487,500
In December 2007, HEART signed a loan agreement with Trestle Glen Associates for $1,760,000 to assist with the development of a 119-unit rental housing project in Colma, CA, which will provide housing for very-low and extremely-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy and/or Notice of Completion for the development, whichever is later, and bears interest at a rate of 3% per annum. The Certificate of Occupancy was issued on December 30, 2009. 1,760,000 1,760,000 Sub-total carried forward $ 4,442,366 $ 4,467,366
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023

3. RECEIVABLES (CONTINUED)
(b) Loans Receivable
2024 2023
Sub-total carried forward $ 4,442,366 $ 4,467,366
In October 2015, Bridge Housing Ventures assumed National Church Residences loan including accrued interest for the amount of $542,123, to assist with the one hundred units of rental housing affordable to low-income households, commonly known as Ocean View Senior Apartments, located at 555 Crespi Drive in Pacifica, California. The loan has a term of 57 years from the date of the modification agreement, which bears interest at a rate of 3% per annum commencing on October 16, 2016. 542,123 542,123 In March 2011, HEART signed a loan agreement with Mid-Peninsula South City, L.P. for $600,000, which was funded by the Genetech Foundation South Francisco Fund to assist with the development of 62-units of a 109-unit rental housing project in South San Francisco, CA, which will provide housing for low and very-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy, which evidences project completion and bears interest at a rate of 3% per annum commencing upon project completion. The Certificate of Occupancy was issued on October 19, 2012. 600,000 600,000
In March 2011, HEART signed a loan agreement with Mid-Peninsula South City II, L.P. for $400,000, which was funded by the Genetech Foundation South Francisco Fund to assist with the development of 47-units of a 109-unit rental housing project in South San Francisco, CA, which will provide housing for low and very-low income households. The loan has a term of 55 years from the issuance of the Certificate of Occupancy, which evidences project completion and bears interest at a rate of 3% per annum commencing upon project completion. The Certificate of Occupancy was issued on October 19, 2012. 400,000 400,000
In December 2021, HEART signed a Deveopment Loan Agreement with MP Downtown San Mateo Associates, L.P. to provide $3,800,000 for the development of 225 rental homes for extremely low- very low- and low-income individuals and families. The project is located in the City of San Mateo. The loan has a term of 55 years from and bears an interest rate of 3% commencing in March 2022. 3,800,000 3,800,000 In February 2024, HEART signed a Deveopment Loan Agreement with CRP Affordable Housing and Community Development CA LLC. to provide $3,000,000 for the development of 65 rental homes for low-income persons and households. The project is located in the City of San Mateo. The loan has a term of 55 years from and bears an interest rate of 5%. 3,000,000 -
In July 2024, HEART signed a Deveopment Loan Agreement with HEART-SV, a California Joint Powers Authority. to provide $450,000 for the development of 8 rental homes for low-income persons and households. The project is located in the City of San Mateo. The loan has a term of 55 years from and bears an interest rate of 3%. 50,000 - Total Loans Receivable $ 12,834,489 $ 9,809,489
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023

4. ACCOUNTS PAYABLE
Accounts payable comprises of the following:

5. NON-CURRENT LIABILITIES
The following is summary of non-current liability activity of HEART:

San Mateo County: Measure-K loan
On August 1, 2017 HEART entered into a loan agreement with the County of San Mateo for an amount of $5,000,000 with a maturity date of July 31, 2024. Interest rate will be paid annually based on the amount of interest that the loan would have earned had it been invested in the San Mateo County Pooled Investment rate starting twelve months from the date of the initial disbursement. The proceeds of the loan will to be used to make predevelopment, acquisition, construction and bridge loans that are consistent with the terms of HEART’s Quick Start Loan Program. As of June 30, 2024 HEART drawn an amount of $5,000,000 from the total loan agreement of $5,000,000. 2024 2023
Payable for contractor service $ 12,986 $ 4,598
Accrued payroll 65,924 57,792
Total Accounts payable $ 78,910 $ 62,390
Balance at Balance at
July 1, 2023 Additions Deletions June 30, 2024
San Mateo County:Measure-K $ 4,620,000 $ 380,000 $ - $ 5,000,000 Total $ 4,620,000 $ 380,000 $ - $ 5,000,000
Balance at Balance at
July 1, 2022 Additions Deletions June 30, 2023
San Mateo County:Measure-K $ 4,620,000 $ - $ - $ 4,620,000 Total $ 4,620,000 $ - $ - $ 4,620,000
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ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023

6. REVENUES
(a) Operating Grants and Contributions
Operating grants and contributions consist of the following:

Member Agencies Dues
Member Agencies are billed annually for dues to cover administrative expenses.

Donors
Other operating grants and contributions include contributions from private donors. (b) Charges for Services
Charges for services are loan processing fees collected from home buyers upon close of escrow on each home loan.
(c) Investment Earnings
Investment earnings reported in the government fund statements of revenues, expenditures, and changes in fund balance comprise of quarterly interest received from the County Treasurer on investments made by HEART in the County Pool and interest collected from developers on cumulative interest receivable accrued. Interest is recorded in the year it is earned and is available to pay current liabilities.

Investment earnings reported in the government-wide statements of activities includes earnings from the County investments noted above plus interest earned in the current year on loans made to developers.

7. FUND BALANCES / NET POSITION
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which HEART is bound to honor constraints on the specific purpose for which amount in the fund can be spent. As of June 30, 2024 and 2023, fund balance for the governmental fund consists of the following classifications respectively:
(a) Nonspendable Fund Balance – includes amounts that cannot be spent because they are not in spendable form, such as prepaid items and loans receivable. (b) Restricted Fund Balance – includes amounts that can be spent only for specific purposes stipulated by external resources providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. (c) Unassigned Fund Balance – is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications.

In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted and then unassigned. 28 ATTACHMENT 2
160
B.

ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2024 AND 2023

7. FUND BALANCES / NET POSITION (CONTINUED)
At fiscal year-end, fund balance reported on the balance sheets on page 17 includes:

The amount shown as restricted above is also reported as restricted net position on the statement of net positions on page 13.

8. RISK MANAGEMENT
HEART is exposed to various risks of losses related to assets having a current or future benefit to HEART.

HEART has insurance coverage provided by the Hartford. In addition, HEART has special excess liability insurance coverage provided as part of the County's insurance coverage. The existing insurance policies are current as of the issuance of this report. Under an agreement with the County, the Department of Housing (DOH) of San Mateo County provides fiscal and program services to HEART. Agents of the DOH are covered by the County’s insurance provider. The County Counsel provides legal representation for any claims or litigation of HEART under a contract. For the years ended June 30, 2024 and 2023, the annual amount contracted with County Counsel for legal representation was $1,069 and $9,773 respectively.
2024 2023
Nonspendable $ 12,834,489 $ 9,809,489
Restricted:

Home Buyer Assistance Loan Program - pledge account
see Note 2(a) 421,359 414,960
Unassigned 9,705,990 10,230,419
Total Fund Balance $ 22,961,838 $ 20,454,868
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ATTACHMENT 1
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ATTACHMENT 1

REQUIRED SUPPLEMENTARY INFORMATION
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ATTACHMENT 1
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ATTACHMENT 1
Actual
Amount Variance with
Budgeted Budgeted Budgetary Final Budget
Amount Amount Basis Positive
Original Final (Note 1) (Negative)
Revenues
Member Agency contributions $ 236,286 $ 236,286 $ 236,363 $ 77 Other contributions 355,000 355,000 2,081,483 1,726,483 Investment earnings 157,166 157,166 386,061 228,895
Charges for services and other 587,801 587,801 262,225 (325,576) administrative support 1,336,253 1,336,253 2,966,132 1,629,879 Expenditures
General management and
administrative support 1,274,392 1,274,392 933,913 340,479 Legal services 72,000 72,000 1,069 70,931
Debt services
Interest and fiscal charges 100,000 100,000 92,758 7,242 Contingency - - 201 (201)
Total Expenditures 1,446,392 1,446,392 1,027,941 418,451 Net Change in Fund Balance $ (110,139) $ (110,139) 2,318,191 2,428,330 Fund Balance - beginning 20,695,673
Fund Balance - ending $ 23,013,864
Housing Endowment and Regional Trust of San Mateo County Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2024
33 ATTACHMENT 2
165
B.

ATTACHMENT 1

HOUSING ENDOWMENT AND REGIONAL TRUST OF SAN MATEO COUNTY

NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024 and 2023

1. BUDGETS, BUDGETARY PROCESS, AND ENCUMBRANCES
HEART uses two funding sources to manage operations: Administrative Funds and Program Funds. The Board adopts an annual operating budget, which can be amended by the Board throughout the year. Actual revenues and expenditures presented reflect activity in both funds during the year. As discussed in Note 1(d) of the notes to the basic financial statements, the basis used to prepare the budget is the same as the basis used to reflect actual revenues and expenditures, except for unrealized gains and losses under GASB 31. The financial statements record unrealized gains and losses as required by Generally Accepted Accounting Principles (GAAP). Adjustments were made to certain budgeted accounts to reflect changes made in financial statement presentation.

HEART uses an encumbrance system to assist in controlling expenditures. Purchase orders, contracts, and other commitments for the expenditures of monies are recorded under this system in order to reserve applicable appropriations. Any encumbrances outstanding at year-end are recorded as reservations of fund balance as they do not constitute expenditures or liabilities.

The actual net change in fund balance under the budgetary basis on page 33 is reconciled to the change in fund balance under GAAP on page 18 as follows:

Explanation of difference between budgetary basis and GAAP basis:

FY 23-24
Ca Net Change in Fund Balance - budgetary basis $ 2,318,191 sh on hand - Net unrealized loss on cash in County Investment Pool
under GASB 31 188,779
Change in Fund Balance - GAAP basis $ 2,506,970
Fund Balance - budgetary basis $ 23,013,864
Unrealized loss on cash in County Investment Pool
under GASB 31 as of June 30, 2024 (52,026)
Fund Balance - GAAP basis $ 22,961,838
34 ATTACHMENT 2
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ATTACHMENT 1

SUPPLEMENTARY INFORMATION
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ATTACHMENT 1
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ATTACHMENT 1
Program Administrative
Funds Funds Total
Revenues
Member agency contributions $ - $ 236,363 $ 236,363
Donor contributions 1,938,375 143,108 2,081,483
Investment earnings - 386,061 386,061
Loan origination fees 217,156 45,069 262,225
Total Revenues 2,155,531 810,601 2,966,132
Expenditures
General management and
administrative support 768,541 165,372 933,913
Legal services 553 516 1,069
Debt services
Interest and fiscal charges 92,758 - 92,758
Total Expenditures 861,852 166,089 1,027,941
Excess (Deficiency) of Revenues Over
(Under) Expenditures 1,293,679 644,512 1,938,191
Other Financing Sources (Uses)
Loan proceeds:
- San Mateo County Measure K Loan 380,000 - 380,000
Total Other Financing Sources (Uses) 380,000 - 380,000
Net Change in Fund Balance 1,673,679 644,512 2,318,191
Fund Balance - beginning 19,353,909 1,341,764 20,695,673 Fund Balance - ending $ 21,027,588 $ 1,986,276 $ 23,013,864 required by generally accepted accounting principles.

Housing Endowment and Regional Trust of San Mateo County Status of Funds
For the Year Ended June 30, 2024
Notes:
(1) All income received from investment earnings is categorized to Program Funds (2) The above schedule does not include adjustments made for GASB No. 31 as 37 ATTACHMENT 2
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ATTACHMENT 1

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and major fund of the Housing Endowment and Regional Trust of San Mateo County (HEART) as of and for the years ended June 30, 2024 and 2023, and the related notes to the financial statements, which collectively comprise HEART’s basic financial statements, and have issued our report thereon dated August 31, 2025.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered HEART’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of HEART’s internal control. Accordingly, we do not express an opinion on the effectiveness of HEART’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 39 ATTACHMENT 2
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ATTACHMENT 1
To the Board of Directors
of the Housing Endowment and Regional Trust
of San Mateo County
San Mateo, California

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether HEART’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Badawi & Associates, CPAs
Emeryville, California
August 31, 2025
40 ATTACHMENT 2
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ATTACHMENT 1
Property Management Company
HEART-SV has interviewed four (4) qualified property management companies and is still in the process of negotiating a property management agreement for the Project. Although we have not signed an agreement with the following company, we have included their qualifications to ensure Brisbane City Staff of the availability of qualified managers. The property management company is subject to change to a company other than the company listed below.

Prodesse Property Group has been in business for 29 years and currently manages over 200 properties. Prodesse Property Group’s most public affordable management portfolio is in the North Fair Oaks neighborhood, near Redwood City. There they oversee the St. Francis Center’s residential portfolio of smaller 2-20 unit affordable buildings as well as the 64-unit Renalto Court, which was purchased as a community benefit associated with the Malibu Grand Prix redevelopment application.

Prodesse Property Group has experience managing market rate, naturally occurring affordable, and deed restricted housing throughout the peninsula. Their experience with property management and the tenant income verification process is what attracted us to hire them for a property HEART-SV acquired in 2024 in Redwood City.

ATTACHMENT 2
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ATTACHMENT 1
Date Activity Notes
By October 2025 Subcommittee Review and Recommendation
November 1 - December 15, 2025 Due Diligence Period
HEART will expend funds on due
diligence consultants once recommend
by City Subcommittee
December 1, 2025 HEART Draft Loan Documents completed Available for City review December 1, 2025
Receive Draft Ground Lease and Loan
Documents from City
December 10, 2025 HEART Board loan approval & Project
acquisition by HEART-SV
January 2026 Authority Action
January 28, 2026 City and HEART deposit loan funds into escrow January 30, 2026 Closing
February, 01, 2026 Rehabilitation commences Per property needs assessment direction and weather permitting
Housing Endowment and Regional Trust of San Mateo County Visitacion Gardens
Proposed Schedule
ATTACHMENT 2
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ATTACHMENT 1
Property Inspections
HEART has not completed any due diligence as of this proposal date. HEART will only begin conducting a full due diligence review upon notification from the City that the City Subcommittee is recommending HEART for the Project.

ATTACHMENT 2
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B.

ATTACHMENT 1
Financing Commitments
Based on the information provided in the RFP, and the resulting Project deficit, HEART staff is planning to provide a 15-year $262,350 loan to the Project. Final approval for this commitment is subject to the HEART Board’s approval. HEART staff is planning to obtain Board approval on December 10, 2025.

ATTACHMENT 2
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B.

ATTACHMENT 1
Operating Subsidy Commitment
Not applicable.

ATTACHMENT 2
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B.

ATTACHMENT 1
Relocation Plan and Budget
Not applicable.

ATTACHMENT 2
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B.

ATTACHMENT 1
Enclosure B

Enclosure B – Proposer Certifications
Proposer hereby certifies:

1. Truth of Application
That the information submitted in the proposal and any supporting materials is true, accurate, and complete to the best of its knowledge. Proposer acknowledges and understands that if facts and/or information herein are found to be misrepresented, it shall constitute grounds for rejecting the proposal or ending negotiations.

2. Applications are Public Records
That Proposer acknowledges that the information submitted as part of this proposal may be made available to the public pursuant to a request under the California Public Records Act.

3. Legal Authority
The signatory has the legal authority to submit this proposal on behalf of the Proposer.

4. Civil and Legal Questions (include an explanation for any questions answered “Yes”)
a. Has the Proposer filed bankruptcy or receivership or had a bankruptcy or receivership commenced against it, defaulted on a loan, or been foreclosed against in the past ten years?
b. Is the Proposer currently a party to, or has it been notified that it may become a party to any civil litigation that may materially and adversely affect the financial condition of the Proposer’s business in this proposal?
c. Have there been any administrative or civil settlements, decisions, or judgements against the Proposer within the past 10 years that materially and adversely affected the financial condition of the Proposer’s business in this proposal?
d. Is the Proposer currently subject to, or been notified that it may become subject to, any civil or administrative proceeding, examination, or investigation by a local, state, or federal licensing or accreditation agency, a local, state, federal taxing authority, or a local, state, or federal regulatory or enforcement agency?
e. In the past 10 years, has the Proposer been subject to any civil or administrative proceeding, examination, or investigation by a local, state, or federal licensing or accreditation agency, a local, state, or federal taxing authority, or a local, ATTACHMENT 2
179
B.

ATTACHMENT 1
Enclosure B

state, or federal regulatory or enforcement agency that resulted in a settlement, decision, or judgment?
f. Is the Proposer currently a party to, or the subject of, or been notified that it may become a party to or the subject of, any criminal litigation, proceeding, charge, complaint, examination, or investigation, of any kind, involving, or that could result in felony charges against the Proposer?
g. Is the Proposer currently a party to, or the subject of, or been notified that it may become a party to or the subject of, any criminal litigation, proceeding, charge, complaint, examination or investigation, of any kind, involving, or that could result in misdemeanor charges against the Proposer for matters relating to the conduct of the Proposer’s business?
h. Is the Proposer currently a party to, or the subject of, or been notified that it may become a party to or the subject of, any criminal litigation, proceeding, charge, complaint, examination or investigation, of any kind, involving, or that could result in criminal charges against the Proposer for any financial or fraud related crime?
i. Is the Proposer currently a party to, or the subject of, or been notified that it may become a party to or the subject of, any criminal litigation, proceeding, charge, complaint, examination or investigation, of any kind, involving, or that could result in criminal charges against the Proposer that could affect the financial condition of the Proposer’s business?
j. Within the past 10 years, has the Proposer been convicted of any felony? k. Within the past 10 years, has the Proposer been convicted of any misdemeanor related to the conduct of the Proposer’s business?
l. Within the past 10 years, has the Proposer been convicted of any misdemeanor for any financial or fraud related crime?
Proposer Name and Title: Organization:
_____________________________________________________________ ____________ Signature Date
__________________________________________ _______________________ ATTACHMENT 2
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B.

ATTACHMENT 1
Project Requirements
HEART requests the following changes to Table 5 of the RFP and the background tables referenced therein.

Income Limits & Maximum Rents. Consistent with the current owner’s practice, HEART intends to stack public subsidies on a limited number of units. Please note that neither HEART’s proposal nor the current owner’s existing rent table match the Table 1 or Table 2 of the RFP due to the stacking of public subsidies. This practice will allow HEART to operate a mixed-income project renting to tenants between 30% and 80% AMI. This will generate sufficient rental income to sustain the project in the long-run. Please see Item 6 on the Letter of Intent.

In addition, HEART proposes to replace the two 40% AMI units with one 30% AMI unit and one 50% AMI unit. This will enable HEART to implement the State Office of Housing and Community Development (HCD) published rent levels.

Debt Coverage Ratio. All proposed project loans are residual receipt loans with no hard debt payment requirements. Therefore, the project does not have a debt service coverage ratio.

Property Welfare Tax. HEART and its affiliate HEART-SV are public joint powers authorities and are not subject to ad valorem property taxes. Therefore, it is not necessary to include the property welfare tax exemption in the Project budget.

Insurance Requirements. HEART requests the City waive Professional Liability Coverage as this project does not constitute providing professional consulting services to the City. Second, we are requesting the City waive workers’ compensation for HEART-SV. As noted in the proposal, HEART intends to assign the acquisition of the property to its affiliate HEART-SV. HEART-SV serves as the legal entity holding title to assets acquired under HEART’s programs and as such it does not have any employees. HEART carries workers compensation and names HEART-SV as an additional insured. The City of Brisbane is also an additional insured on HEART’s insurance.

ATTACHMENT 2
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B.

ATTACHMENT 1
14 93%
$ 4,322,518
$ 294,999
$ 322,350
$ 4,939,867
#DIV/0!
$ 352,848
40%
59%
Est. Interest Rate
Est. Interest-Only Period

AFFORDABILITY
Average BRIDGE AMI level
Average HEART AMI level

LOAN DETAILS
Bank:

Amortization (yrs.)
Interest-Only Period (yrs.)
Min. Debt Cov. Ratio
Max. Loan-to-Value
Proforma Loan-to-Value
HEART Funds
Total Cost
Total Cost (not PP) per SF of buildling
Total Cost per Unit
Loan Term (yrs.)
Occupancy at Purchase
RDA of the City of Brisbane/Authority Loans
County of San Mateo (HOME funds)
8 Visitacion Avenue, Brisbane

PROPERTY SUMMARY
Residential Unit Count
Building Size (SF)
Parcel Size (SF)
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ATTACHMENT 1
8 Visitacion Avenue, Brisbane
Income Limits YR: 2025
CA Annual Rent Cap: 5% + CPI or 10%, whichever is less
Assumptions: 30%
2025 Utility Allowance Schedule/mo. - San Mateo County
Studio 1BR 2BR 3BR
1P 1.5P 3P 4.5P
Natural Gas $ 26 $ 32 $ 37 $ 41
Electric $ - $ - $ - $ -
Natural Gas $ - $ - $ - $ -
Electric $ 11 $ 13 $ 18 $ 24
Other Electric (incl. climate credit) $ 34 $ 42 $ 62 $ 85 Air Conditioning $ - $ - $ - $ -
Natural Gas $ - $ - $ - $ -
Electric $ - $ - $ - $ -
Water $ - $ - $ - $ -
Trash $ - $ - $ - $ -
Range/Microwave $ 11 $ 11 $ 11 $ 11
Refrigerator $ 12 $ 12 $ 12 $ 12
Total $ 94 $ 110 $ 140 $ 173
2025 HCD Income Limits
Extremely Low-Income (30%) Very Low-Income (50%) Low-Income (60%) 30% of Max. 30% of Max. 30% of Max.

Household Annual Annual Monthly Household Annual Annual Monthly Household Annual Annual Monthly Size Income Income Rent Size Income Income Rent Size Income Income Rent 1 $ 41,150 $ 12,345 $ 1,029 1 $ 68,550 $ 20,565 $ 1,714 1 $ 82,260 $ 24,678 $ 2,057 2 $ 47,000 $ 14,100 $ 1,175 2 $ 78,350 $ 23,505 $ 1,959 2 $ 94,020 $ 28,206 $ 2,351 3 $ 52,900 $ 15,870 $ 1,323 3 $ 88,150 $ 26,445 $ 2,204 3 $ 105,780 $ 31,734 $ 2,645 4 $ 58,750 $ 17,625 $ 1,469 4 $ 97,900 $ 29,370 $ 2,448 4 $ 117,480 $ 35,244 $ 2,937 5 $ 63,450 $ 19,035 $ 1,586 5 $ 105,750 $ 31,725 $ 2,644 5 $ 126,900 $ 38,070 $ 3,173 6 $ 68,150 $ 20,445 $ 1,704 6 $ 113,600 $ 34,080 $ 2,840 6 $ 136,320 $ 40,896 $ 3,408 7 $ 72,850 $ 21,855 $ 1,821 7 $ 121,400 $ 36,420 $ 3,035 7 $ 145,680 $ 43,704 $ 3,642 8+ $ 77,550 $ 23,265 $ 1,939 8+ $ 129,250 $ 38,775 $ 3,231 8+ $ 155,100 $ 46,530 $ 3,878 Low-Income (80%) Median-Income (100%) Moderate-Income (120%) 30% of Max. 30% of Max. 30% of Max.

Household Annual Annual Monthly Household Annual Annual Monthly Household Annual Annual Monthly Size Income Income Rent Size Income Income Rent Size Income Income Rent 1 $ 109,700 $ 32,910 $ 2,743 1 $ 130,600 $ 39,180 $ 3,265 1 $ 156,750 $ 47,025 $ 3,919 2 $ 125,350 $ 37,605 $ 3,134 2 $ 149,300 $ 44,790 $ 3,733 2 $ 179,100 $ 53,730 $ 4,478 3 $ 141,000 $ 42,300 $ 3,525 3 $ 167,950 $ 50,385 $ 4,199 3 $ 201,500 $ 60,450 $ 5,038 4 $ 156,650 $ 46,995 $ 3,916 4 $ 186,600 $ 55,980 $ 4,665 4 $ 223,900 $ 67,170 $ 5,598 of household income is the maximum monthly housing
payment, including utilities, insurance, taxes, and home Heating
Cooking
Water Heating
183
B.

ATTACHMENT 1
5 $ 169,200 $ 50,760 $ 4,230 5 $ 201,550 $ 60,465 $ 5,039 5 $ 241,800 $ 72,540 $ 6,045 6 $ 181,750 $ 54,525 $ 4,544 6 $ 216,450 $ 64,935 $ 5,411 6 $ 259,700 $ 77,910 $ 6,493 7 $ 194,250 $ 58,275 $ 4,856 7 $ 231,400 $ 69,420 $ 5,785 7 $ 277,650 $ 83,295 $ 6,941 8+ $ 206,800 $ 62,040 $ 5,170 8+ $ 246,300 $ 73,890 $ 6,158 8+ $ 295,550 $ 88,665 $ 7,389 184
B.

ATTACHMENT 1
8 Visitacion Avenue, Brisbane

HCD TCAC H&SC HUD HOME
Max Monthly Rent Max Rent Calculations Max Rent Calculations Max Rent Calculations Annual Income
30% of Annual
Income
Max Monthly
Rent
Annual Income 30% of Annual
Income
Max Monthly
Rent
$ 156,750 $ 47,025 $ 3,919 $ 143,660 $ 43,098 $ 3,592
$ 179,100 $ 53,730.00 $ 4,478 $ 164,230 $ 49,269 $ 4,106 $ 201,500 $ 60,450.00 $ 5,038 $ 184,745 $ 55,424 $ 4,619 Annual Income 30% of Annual
Income
Max Monthly
Rent
Annual Income 30% of Annual
Income
Max Monthly
Rent
Annual Income 30% of Annual
Income
Max Monthly
Rent
$ 130,600 $ 39,180 $ 3,265 $ 135,400 $ 40,620 $ 3,385 $ 130,600 $ 39,180 $ 3,265 $ 149,300 $ 44,790 $ 3,733 $ 154,800 $ 46,440 $ 3,870 $ 149,300 $ 44,790 $ 3,733 $ 167,950 $ 50,385 $ 4,199 $ 174,100 $ 52,230 $ 4,353 $ 167,950 $ 50,385 $ 4,199 Annual Income
30% of Annual
Income
Max Monthly
Rent Annual Income
30% of Annual
Income
Max Monthly
Rent Annual Income
30% of Annual
Income
Max Monthly
Rent
$ 109,700 $ 32,910 $ 2,743 $ 108,320 $ 32,496 $ 2,708 $ 78,360 $ 23,508 $ 1,959 $ 125,350 $ 37,605 $ 3,134 $ 123,840 $ 37,152 $ 3,096 $ 89,580 $ 26,874 $ 2,240 $ 141,000 $ 42,300 $ 3,525 $ 139,280 $ 41,784 $ 3,482 $ 100,770 $ 30,231 $ 2,519 Annual Income 30% of Annual
Income
Max Monthly
Rent
Annual Income 30% of Annual
Income
Max Monthly
Rent
Annual Income 30% of Annual
Income
Max Monthly
Rent
$ 82,260 $ 24,678 $ 2,057 $ 81,240 $ 24,372 $ 2,031 $ 78,360 $ 23,508 $ 1,959 $ 94,020 $ 28,206 $ 2,351 $ 92,880 $ 27,864 $ 2,322 $ 89,580 $ 26,874 $ 2,240 $ 105,780 $ 31,734 $ 2,645 $ 104,460 $ 31,338 $ 2,612 $ 100,770 $ 30,231 $ 2,519 Annual Income
30% of Annual
Income
Max Monthly
Rent Annual Income
30% of Annual
Income
Max Monthly
Rent Annual Income
30% of Annual
Income
Max Monthly
Rent
$ 68,550 $ 20,565 $ 1,714 $ 67,700 $ 20,310 $ 1,693 $ 65,300 $ 19,590 $ 1,633 $ 78,350 $ 23,505 $ 1,959 $ 77,400 $ 23,220 $ 1,935 $ 74,650 $ 22,395 $ 1,866 $ 88,150 $ 26,445 $ 2,204 $ 87,050 $ 26,115 $ 2,176 $ 83,975 $ 25,193 $ 2,099 Annual Income
30% of Annual
Income
Max Monthly
Rent Annual Income
30% of Annual
Income
Max Monthly
Rent Annual Income
30% of Annual
Income
Max Monthly
Rent
$ 41,150 $ 12,345 $ 1,029 $ 40,620 $ 12,186 $ 1,016 $ 39,180 $ 11,754 $ 980 $ 47,000 $ 14,100 $ 1,175 $ 46,440 $ 13,932 $ 1,161 $ 44,790 $ 13,437 $ 1,120 $ 52,900 $ 15,870 $ 1,323 $ 52,230 $ 15,669 $ 1,306 $ 50,385 $ 15,116 $ 1,260 Max Monthly Rent based on Household Size Max Monthly Rent based on Household Size Max Monthly Rent based on Household Size Max Monthly Rent based on Household Size 0BR 1BR 2BR 0BR 1BR 2BR 0BR 1BR 2BR 0BR 1BR 2BR
1 Person 1.5 Persons 3 Persons 1 Person 1.5 Persons 3 Persons 1 Person 2 persons 3 Persons Moderate 120% $ 3,919 $ 4,198 $ 5,038
Median 100% $ 3,265 $ 3,499 $ 4,199 Median 100% $ 3,385 $ 3,628 $ 4,353 Moderate 120% $ 3,592 $ 4,106 $ 4,619 Low 80% $ 2,743 $ 2,938 $ 3,525 Low 80% $ 2,708 $ 2,902 $ 3,482 Low 80% $ 1,959 $ 2,240 $ 2,519 Low 60% $ 2,057 $ 2,204 $ 2,645 Low 60% $ 2,031 $ 2,177 $ 2,612 Low 60% $ 1,959 $ 2,240 $ 2,519 High HOME Limit $ 2,208 $ 2,366 $ 2,842 VLI 50% $ 1,714 $ 1,959 $ 2,204 VLI 50% $ 1,693 $ 1,814 $ 2,176 VLI 50% $ 1,633 $ 1,866 $ 2,099 Low HOME Limit $ 1,713 $ 1,836 $ 2,203 ELI 30% $ 1,029 $ 1,102 $ 1,323 ELI 30% $ 1,016 $ 1,088 $ 1,306 ELI 30% $ 980 $ 1,120 $ 1,260 Net Max Monthly Rent based on Household Size & Utility Allowance Net Max Monthly Rent based on Household Size Net Max Monthly Rent based on Household Size Net Max Monthly Rent based on Household Size 0BR Utility Allowance $ 94 0BR Utility Allowance $ 94 0BR Utility Allowance $ 94 0BR Utility Allowance $ 94 1BR Utility Allowance $ 110 1BR Utility Allowance $ 110 1BR Utility Allowance $ 110 1BR Utility Allowance $ 110 2BR Utility Allowance $ 140 2BR Utility Allowance $ 140 2BR Utility Allowance $ 140 2BR Utility Allowance $ 140 0BR 1BR 2BR 0BR 1BR 2BR 0 BR 1BR 2BR 0 BR 1BR 2BR
1 Person 1.5 Persons 3 Persons 1 Person 1.5 Persons 3 Persons 1 Person 2 persons 3 Persons Moderate 120% $ 3,825 $ 4,088 $ 4,898
Median 100% $ 3,171 $ 3,389 $ 4,059 Median 100% $ 3,291 $ 3,518 $ 4,213 Moderate 120% $ 3,498 $ 3,996 $ 4,479 Low 80% $ 2,649 $ 2,828 $ 3,385 Low 80% $ 2,614 $ 2,792 $ 3,342 Low 80% $ 1,865 $ 2,130 $ 2,379 Low 60% $ 1,963 $ 2,094 $ 2,505 Low 60% $ 1,937 $ 2,067 $ 2,472 Low 60% $ 1,865 $ 2,130 $ 2,379 High HOME Limit $ 2,114 $ 2,256 $ 2,702 VLI 50% $ 1,620 $ 1,849 $ 2,064 VLI 50% $ 1,599 $ 1,704 $ 2,036 VLI 50% $ 1,539 $ 1,756 $ 1,959 Low HOME Limit $ 1,619 $ 1,726 $ 2,063 ELI 30% $ 935 $ 992 $ 1,183 ELI 30% $ 922 $ 978 $ 1,166 ELI 30% $ 886 $ 1,010 $ 1,120 Moderate-Income 120%
Household size
1 2
3 Area Median Income
Area Median Income Area Median Income Area Median Income Area Median Income
Area Median Income
Area Median Income Area Median Income
2 3
Median-Income 100%
Low-Income 80%
Low-Income 60%
Very Low-Income 50%
Extremely Low-Income 30%
Household size
1 2
3 Household size
1 2
3 Household size
1 1
2 3
Household size
1 2
3 Household size
1 Household size
1 2
Low-Income 80%
Low-Income 60%
Low-Income 80%
2 3
2 3
Household size
Household size
1 2
1 2
Very Low-Income 50%
Extremely Low-Income 30%
3 1
2 3
Household size
1 2
2 3
Household size
1 3
Household size
3 Household size
Household size
1 2
3 Low-Income 60%
Very Low-Income 50%
Extremely Low-Income 30%
1 Moderate-Income 120%
3 Household size
1 2
Household size
1 2
3 Household size
Median-Income 100%
3 Median-Income 100%
185
B.

ATTACHMENT 1
8 Visitacion Avenue, Brisbane
Loan Int. Rate 3%
Sources and Uses Daily Int. Rate 0.0082191781%
Acquisition/Rehab Sources Acquisition Perm Per Unit Term (yr.) Rate LTV Lien Pos. Notes RDA of the City of Brisbane/Authority Loan 1 RDA of the City of Brisbane/Authority Loan 1 $ 1,514,182 $ 108,156 30 3.00% 35.5% --> Outstanding Debt as of Principal Remaining Loan Amt Accrued Interest Date of Calc. Days Accrued Interest Outstanding Debt RDA of the City of Brisbane/Authority Loan 2 $ 2,458,336 $ 175,595 40 3.00% 57.6% --> 7/1/2025 $ 1,000,000 $ 899,873 $ 600,700 1/1/2026 184 $ 13,609.04 $ 1,514,182 County of San Mateo (HOME funds) $ 294,999 $ 21,071 30 3.00% 6.9% --> New City Loan $ 350,000 $ 25,000 55 3.00% 8.2% 4
New HEART Loan $ 262,350 $ 18,739 15 3.00% 6.1% 5
Deferred developer's Fee - HEART SV $ 60,000 $ 4,286 n/a 3.00% 1.4% n/a RDA of the City of Brisbane/Authority Loan 2 Outstanding Debt as of Principal Remaining Loan Amt Accrued Interest Date of Calc. Days Accrued Interest Outstanding Debt TOTAL $ 4,939,867 $ 352,848 7/1/2025 $ 1,500,000 $ 1,436,214 $ 1,000,402 1/1/2026 184 $ 21,720.28 $ 2,458,336 DSCR: #DIV/0!
Uses Total Cost Per Unit Rate Notes County of San Mateo (HOME funds) Acquisition Outstanding Debt as of Principal Remaining Loan Amt Accrued Interest Date of Calc. Days Accrued Interest Outstanding Debt Property Acquisition (PURCHASE PRICE) $ 4,267,517 $ 304,823 7/1/2025 $ 175,000 $ 175,000 $ 117,352 1/1/2026 184 $ 2,647 $ 294,999 Closing Costs - Escrow $ 14,275 $ 1,020 0.3% First American Title Relocation/Temp. Relocation
Total Acquisition $ 4,281,792 $ 305,842
Construction
Rehabilitation Costs $ 303,000 $ 21,643 Linked to PNA Mar 2024 Rehab overhead & profit $ - $ - 15.0% COST SUMMARY Total Costs $/unit Rehabilitation Contingency $ 60,600 $ 4,329 20.0% 20% of hard costs Brisbane requirement Total Acquisition $ 4,281,792 $ 305,842 Total Construction $ 363,600 $ 25,971 TOTAL REHABILITATION $ 370,872 $ 26,491 TOTAL OTHER SOFT COSTS $ 23,112 $ 1,651
SOFT COSTS TOTAL FINANCING $ 3,935 $ 281
Architecture & Design TOTAL DEVELOPER FEE $ 120,485 $ 8,606 Architect $ - $ - 0.00% TOTAL RESERVES $ 139,670 $ 9,976 Third-party Design Consultants $ - $ - $ 4,939,866 $ 352,848 Total Architect & Design $ - $ -
Eng. & Env. Studies
Engineering $ - $ -
Survey $ - $ -
Property Needs Assessment & Walkways Inspection $ 7,500 $ 536 Association Reserves Seismic Study $ - $ - Jaime Neilson Structural Eng.

Other Environmental Consultants $ 1,850 $ 132 CRETelligent Phase I Report Est. Closing Costs Based on Stambaugh Total Eng. & Env. Studies $ 9,350 $ 668 $ 3,000 County
$ 3,000 City
Other Soft Development Costs $ 1,800 HEART
Appraisal $ 6,000 $ 429 $ 3,800 Owner
Construction Management Fee $ - $ - 5.0% % of hard cost $ 2,375 Escrow Fee Permits $ 7,272 $ 519 2.0% % of hard cost $ 300 Mobile Signing Relocation Consultant $ 14,275
Utilities Fees $ - $ -
Insurance $ - $ -
Marketing $ - $ -
Property Taxes $ -
Total Other Soft Development Costs $ 13,272 $ 948
Legal Costs
Borrower/Project Legal Costs $ 5,000 $ 357
Other Legal Costs $ - $ -
$ - $ -
Total Legal Costs $ 5,000 $ 357
Soft Cost Contingency $ 2,762 $ 197 10% 10% of soft costs Brisbane requirements TOTAL SOFT COSTS $ 30,384 $ 2,170

FINANCING COSTS
Conv. Loan Fee $ - $ -
Prepaid Interest Bank Loan $ - $ -
Accrued Interest HEART Bridge Loan $ - $ -
Accrued Interest HEART LHTF Loan $ - $ -
LHTF Loan Fee $ - $ - 1.5%
HEART - Trust Funds Loan Fee $ 3,935 $ 281 1.5%
Local City Loan Fee $ -
Total Financing Costs $ 3,935 $ 281

DEVELOPER COSTS
Developer Fee $ 120,485 $ 8,606 2.50% Greater of 2.5% or $120,000 TOTAL DEVELOPER FEE $ 120,485 $ 8,606

RESERVES
Vacancy Reserve $ - $ - 0.0% Only fund if there is a vacancy at time of purchase. If vacancy, use 3.5% of Eff. Gross Income Operating Reserve $ 49,250 $ 3,518 3 mo. expenses + reserves + debt obligation Replacement Reserve $ 90,420 $ 6,459 Years 4 and 5 from PNA Debt Service Coverage Reserve $ -
TOTAL RESERVES $ 139,670 $ 9,976
TOTAL DEVELOPMENT COST $ 4,939,866 $ 352,848
$1
Maintain existing lien position
Maintain existing lien position
Maintain existing lien position
186
B.

ATTACHMENT 1
8 Visitacion Avenue, Brisbane
County County Current Utility Current Current Current Section 8 Rent Growth 0% Current Year Year Year Year Year Year Year Year Year Year BHC Low High City Designated Gross Rent Allowance Paid Rent Paid Rent Tenant Rent Voucher Lease Start Rent Paid 1 2 3 4 5 6 7 8 9 10 Unit # Bed Bath HOME HOME AMI% $/mo. AMI% HCD $/mo. Income HH Size AMI% HCD Unit # 2026 Annually 1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030 1/1/2031 1/1/2032 1/1/2033 1/1/2034 1/1/2035 V1 1 1 80% 120% 80% $ 1,320 85 $ 1,235 40% $ 1,235 $ 33,044 1 25% V1 2017 9 $ 14,820 $ 14,820 $ 15,265 $ 15,723 $ 16,194 $ 28,761 $ 29,624 $ 30,513 $ 31,428 $ 32,371 $ 33,342 V10 1 1 80% 30% 30% $ 641 85 $ 556 20% $ 556 $ 17,697 1 14% V10 2003 23 $ 6,672 $ 6,672 $ 6,872 $ 12,855 $ 13,241 $ 13,638 $ 14,047 $ 14,468 $ 14,902 $ 15,349 $ 15,810 V2 1 1 80% 80% 50% $ 1,143 85 $ 1,058 35% $ 1,058 $ 25,094 1 19% V2 2019 7 $ 12,696 $ 12,696 $ 13,077 $ 13,469 $ 13,873 $ 14,289 $ 14,718 $ 25,165 $ 25,920 $ 26,697 $ 27,498 V4 1 1 80% 60% 80% 50% $ 1,143 85 $ 1,058 35% $ 1,058 $ 27,355 1 21% V4 2020 6 $ 12,696 $ 12,696 $ 13,077 $ 13,469 $ 13,873 $ 14,289 $ 14,718 $ 15,160 $ 15,614 $ 32,371 $ 33,342 V5 1 1 80% 120% 80% $ 1,320 85 $ 1,235 40% $ 1,235 $ 30,301 1 23% V5 2020 6 $ 14,820 $ 14,820 $ 15,265 $ 15,723 $ 16,194 $ 16,680 $ 17,180 $ 17,696 $ 18,227 $ 18,774 $ 32,779 V6 1 1 80% 50% 30% 30% $ - 85 $ - $ - $ - V6 $ 6,672 $ 6,672 $ 6,872 $ 7,078 $ 7,291 $ 7,509 $ 7,735 $ 7,967 $ 8,206 $ 8,452 $ 33,342 V8 1 1 80% 60% 40% 40% $ 892 85 $ 807 27% $ 807 $ 45,793 1 35% V8 2000 26 $ 9,684 $ 9,684 $ 9,975 $ 26,652 $ 27,451 $ 28,275 $ 29,123 $ 29,997 $ 30,897 $ 31,824 $ 32,779 V9 1 1 80% 120% 60% $ 1,235 85 $ 1,150 38% $ 1,150 $ 16,754 1 13% V9 2021 5 $ 13,800 $ 13,800 $ 14,214 $ 14,640 $ 15,080 $ 15,532 $ 15,998 $ 16,478 $ 16,972 $ 17,481 $ 33,342 I1 2 1 80% 120% 60% $ 2,644 116 $ 2,528 71% $ 509 Voucher $ 24,946 2 17% I1 2016 10 $ 30,336 $ 30,336 $ 31,246 $ 32,183 $ 31,198 $ 32,134 $ 33,098 $ 34,091 $ 35,114 $ 36,168 $ 37,253 I2 2 1 80% 60% 120% 60% $ 1,651 116 $ 1,535 44% $ 1,535 $ 59,206 2 40% I2 2023 3 $ 18,420 $ 18,420 $ 18,973 $ 19,542 $ 20,128 $ 20,732 $ 21,354 $ 21,994 $ 22,654 $ 23,334 $ 39,214 I3 1 1 80% 40% 40% $ 892 85 $ 807 27% $ 807 $ 25,651 1 20% I3 2020 6 $ 9,684 $ 9,684 $ 9,975 $ 10,274 $ 10,582 $ 10,899 $ 11,226 $ 11,563 $ 11,910 $ 12,267 $ 15,810 I4 1 1 80% 60% 120% 50% $ 1,143 85 $ 1,058 35% $ 1,058 $ 22,844 1 17% I4 2019 7 $ 12,696 $ 12,696 $ 13,077 $ 13,469 $ 13,873 $ 14,289 $ 14,718 $ 15,160 $ 14,902 $ 15,349 $ 15,810 I5 1 1 80% 120% 60% $ 2,350 85 $ 2,265 72% $ 621 Voucher $ 42,292 1 32% I5 2023 3 $ 27,180 $ 27,180 $ 27,995 $ 28,835 $ 29,700 $ 30,591 $ 31,509 $ 32,454 $ 33,428 $ 34,431 $ 33,342 I6 1 1 80% 120% 50% $ 1,143 85 $ 1,058 35% $ 1,058 $ 74,155 1 57% I6 2018 8 $ 12,696 $ 12,696 $ 13,077 $ 13,469 $ 13,873 $ 14,289 $ 29,123 $ 29,997 $ 30,897 $ 31,824 $ 32,779 16 14 53% $ 1,168 40% 26% $ 202,872 $ 202,872 208,958$ 237,382$ 242,553$ 261,910$ 284,173$ 302,703$ 311,072$ 336,692$ 416,441$ Average AMI Average Rent Average AMI Average AMI
Current Current Rent Growth 0.03 Current Current Year Year Year Year Year Year Year Year Year Year Tenant Rent Section 8 Income Rent Paid Rent Paid 1 2 3 4 5 6 7 8 9 10 Unit # AMI% AMI% Voucher Income Rent Income Rent Income Rent Unit Deed Restriction Target Rent Limit Unit # Monthly Annually 1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030 1/1/2031 1/1/2032 1/1/2033 1/1/2034 1/1/2035 V1 25% 40% 80% 60% 120% 110% V1 60% 60% H&SC V1 80% $ 1,235 $ 14,820 $ 14,820 $ 15,265 $ 15,723 $ 16,194 $ 16,680 $ 17,180 $ 17,696 $ 18,227 $ 18,774 $ 19,337 V10 14% 20% 80% 60% 50% 50% 30% 50% V10 30% 30% H&SC V10 30% $ 556 $ 6,672 $ 6,672 $ 6,872 $ 7,078 $ 7,291 $ 7,509 $ 7,735 $ 7,967 $ 8,206 $ 8,452 $ 8,705 V2 19% 35% 80% 60% 60% 60% 40% 50% V2 50% 50% H&SC V2 50% $ 1,058 $ 12,696 $ 12,696 $ 13,077 $ 13,469 $ 13,873 $ 14,289 $ 14,718 $ 15,160 $ 15,614 $ 16,083 $ 16,565 V4 21% 35% 80% 60% 120% 110% V4 60% 60% H&SC V4 50% $ 1,058 $ 12,696 $ 12,696 $ 13,077 $ 13,469 $ 13,873 $ 14,289 $ 14,718 $ 15,160 $ 15,614 $ 16,083 $ 16,565 V5 23% 40% 80% 60% 120% 110% V5 120% 80% HCD V5 80% $ 1,235 $ 14,820 $ 14,820 $ 15,265 $ 15,723 $ 16,194 $ 16,680 $ 17,180 $ 17,696 $ 18,227 $ 18,774 $ 19,337 V6 0% 0% 80% 60% 120% 110% V6 60% 60% H&SC V6 30% $ 556 $ 6,672 $ 6,672 $ 6,872 $ 7,078 $ 7,291 $ 7,509 $ 7,735 $ 7,967 $ 8,206 $ 8,452 $ 8,705 V8 35% 27% 80% 60% 120% 110% V8 120% 80% HCD V8 40% $ 807 $ 9,684 $ 9,684 $ 9,975 $ 10,274 $ 10,582 $ 10,899 $ 11,226 $ 11,563 $ 11,910 $ 12,267 $ 12,635 V9 13% 38% 80% 60% 120% 110% V9 60% 60% H&SC V9 60% $ 1,150 $ 13,800 $ 13,800 $ 14,214 $ 14,640 $ 15,080 $ 15,532 $ 15,998 $ 16,478 $ 16,972 $ 17,481 $ 18,006 I1 17% 71% Voucher 80% 60% 60% 60% 80% 60% I1 60% 60% H&SC I1 60% $ 2,528 $ 30,336 $ 30,336 $ 31,246 $ 32,183 $ 33,149 $ 34,143 $ 35,168 $ 36,223 $ 37,309 $ 38,429 $ 39,582 I2 40% 44% 80% 60% 120% 110% I2 120% 80% HCD I2 60% $ 1,535 $ 18,420 $ 18,420 $ 18,973 $ 19,542 $ 20,128 $ 20,732 $ 21,354 $ 21,994 $ 22,654 $ 23,334 $ 24,034 I3 20% 27% 80% 60% 60% 60% 30% 50% I3 30% 30% H&SC I3 40% $ 807 $ 9,684 $ 9,684 $ 9,975 $ 10,274 $ 10,582 $ 10,899 $ 11,226 $ 11,563 $ 11,910 $ 12,267 $ 12,635 I4 17% 35% 80% 60% 60% 60% 40% 50% I4 30% 30% H&SC I4 50% $ 1,058 $ 12,696 $ 12,696 $ 13,077 $ 13,469 $ 13,873 $ 14,289 $ 14,718 $ 15,160 $ 15,614 $ 16,083 $ 16,565 I5 32% 72% Voucher 80% 60% 80% 60% I5 60% 60% H&SC I5 60% $ 2,265 $ 27,180 $ 27,180 $ 27,995 $ 28,835 $ 29,700 $ 30,591 $ 31,509 $ 32,454 $ 33,428 $ 34,431 $ 35,464 I6 57% 35% 80% 60% 120% 110% I6 120% 80% HCD I6 50% $ 1,058 $ 12,696 $ 12,696 $ 13,077 $ 13,469 $ 13,873 $ 14,289 $ 14,718 $ 15,160 $ 15,614 $ 16,083 $ 16,565 $ 16,906 $ 202,872 $ 202,872 208,958$ 215,227$ 221,684$ 228,334$ 235,184$ 242,240$ 249,507$ 256,992$ 264,702$ Rent Growth 0.03 Current Current Year Year Year Year Year Year Year Year Year Year Potential Rent Potential Rent 1 2 3 4 5 6 7 8 9 10
Unit # Monthly Annually 1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030 1/1/2031 1/1/2032 1/1/2033 1/1/2034 1/1/2035 V1 60% $ 2,130 $ 25,554 $ 25,554 26,321$ 27,110$ 27,924$ 28,761$ 29,624$ 30,513$ 31,428$ 32,371$ 33,342$ V10 30% $ 1,010 $ 12,117 $ 12,117 12,481$ 12,855$ 13,241$ 13,638$ 14,047$ 14,468$ 14,902$ 15,349$ 15,810$ V2 50% $ 1,756 $ 21,075 $ 21,075 21,707$ 22,358$ 23,029$ 23,720$ 24,432$ 25,165$ 25,920$ 26,697$ 27,498$ V4 60% $ 2,130 $ 25,554 $ 25,554 26,321$ 27,110$ 27,924$ 28,761$ 29,624$ 30,513$ 31,428$ 32,371$ 33,342$ V5 80%* $ 2,094 $ 25,122 $ 25,122 25,876$ 26,652$ 27,451$ 28,275$ 29,123$ 29,997$ 30,897$ 31,824$ 32,779$ V6 60% $ 2,130 $ 25,554 $ 25,554 26,321$ 27,110$ 27,924$ 28,761$ 29,624$ 30,513$ 31,428$ 32,371$ 33,342$ V8 80%* $ 2,094 $ 25,122 $ 25,122 25,876$ 26,652$ 27,451$ 28,275$ 29,123$ 29,997$ 30,897$ 31,824$ 32,779$ V9 60% $ 2,130 $ 25,554 $ 25,554 26,321$ 27,110$ 27,924$ 28,761$ 29,624$ 30,513$ 31,428$ 32,371$ 33,342$ I1 60% $ 2,379 $ 28,551 $ 28,551 29,408$ 30,290$ 31,198$ 32,134$ 33,098$ 34,091$ 35,114$ 36,168$ 37,253$ I2 80%* $ 2,505 $ 30,054 $ 30,054 30,956$ 31,884$ 32,841$ 33,826$ 34,841$ 35,886$ 36,963$ 38,072$ 39,214$ I3 30% $ 1,010 $ 12,117 $ 12,117 12,481$ 12,855$ 13,241$ 13,638$ 14,047$ 14,468$ 14,902$ 15,349$ 15,810$ I4 30% $ 1,010 $ 12,117 $ 12,117 12,481$ 12,855$ 13,241$ 13,638$ 14,047$ 14,468$ 14,902$ 15,349$ 15,810$ I5 60% $ 2,130 $ 25,554 $ 25,554 26,321$ 27,110$ 27,924$ 28,761$ 29,624$ 30,513$ 31,428$ 32,371$ 33,342$ I6 80%* $ 2,094 $ 25,122 $ 25,122 25,876$ 26,652$ 27,451$ 28,275$ 29,123$ 29,997$ 30,897$ 31,824$ 32,779$ $ 26,597 $ 319,167 $ 319,167 328,742$ 338,604$ 348,762$ 359,225$ 370,002$ 381,102$ 392,535$ 404,311$ 416,441$ *For $ 116,295 $ 116,295 119,784$ 101,223$ 106,210$ $ 97,315 $ 85,829 $ 78,399 $ 81,463 $ 67,619 $ - modeling
purposes,
HEART is
running HCD
60%: H&SC rent is lower than High HOME rent
10 Years: HEART Program Rents
Senior Household means: at least 1
resident is 62 years or older, and all
other residents are either: (a) at
least 45 years old, or (b) provide
primary physical or economic
suppport to a resident who is at
least 62
Current Occupany
BHC
H&SC
Deed Restrictions per Existing Agreeements
If 30% AMI become over 30%
AMI, then rent is 40%;
If 40% AMI becomes over 40%,
then rent is lessor of 50% of
gross income or moderate
income level
If 120% units become over
110% AMI, then rent is 30% of
gross income. If tenant over
120% AMI, then market rent
4 units at
HOME or
120% of
Very Low;
1 unit at
Very Low
4 units at High
HOME or SMC
HOME;
1 unit at Low
HOME or SMC
Very Low
Current
Target Rent
Notes
H&S
50079.5
says "lower
income"
means
Lower as
per Section
8 Definition
Low, or
Lower as
per H&S
50079.5
30% of 60%
AMI Income

HOME H&SC
2 at 30%;
2 at 40%;
2 at 80%; and
rest (8) at 120%
30% and 40%
income units at
50%; and
120% income
units at 110%
County City
HEART Designations
$ 1,150
$ 2,528
$ 1,058
$ 1,058
$ 1,235
$ 556
$ 807
Current Rent $/year
HEART Program Rent $/year
$ 16,906.00
$ 1,535
$ 807
$ 1,058
$ 2,265
$ 1,058
Occupancy since
move-in
HEART Year 1: Rent
1/1/2026
$/month
$ 1,235
BRIDGE Rent Roll: AS-IS Rent Restrictions BRIDGE Rent Roll: AS-IS Rents & Tenancy Current
Tenant
$ 556
187
B.

ATTACHMENT 1
8 Visitacion Avenue, Brisbane
Current Rents Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Unit # 1/1/2026 2/1/2026 3/1/2026 4/1/2026 5/1/2026 6/1/2026 7/1/2026 8/1/2026 9/1/2026 10/1/2026 11/1/2026 12/1/2026 Y1 Total V1 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 14,820 V10 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 6,672 V2 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 12,696 V4 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 12,696 V5 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 1,235 $ 14,820 V6 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 556 $ 6,672 V8 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 9,684 V9 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 13,800 I1 $ 2,528 $ 2,528 $ 2,528 $ 2,528 $ 2,528 $ 2,528 $ 2,528 $ 2,528 $ 2,528 $ 2,528 $ 2,528 $ 2,528 $ 30,336 I2 $ 1,535 $ 1,535 $ 1,535 $ 1,535 $ 1,535 $ 1,535 $ 1,535 $ 1,535 $ 1,535 $ 1,535 $ 1,535 $ 1,535 $ 18,420 I3 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 807 $ 9,684 I4 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 12,696 I5 $ 2,265 $ 2,265 $ 2,265 $ 2,265 $ 2,265 $ 2,265 $ 2,265 $ 2,265 $ 2,265 $ 2,265 $ 2,265 $ 2,265 $ 27,180 I6 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 1,058 $ 12,696 Gross Rent $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 202,872 Reserve Interest $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 4,190 Commercial Unit Utilities $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 3,602 Parking $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Laundry $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 33 Vacancy $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (12,172) $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 198,524 Other Income Per Month Proforma
Reserve Int. 3% $ 349 2026 2025 Budget 2024 2023 2022 2021 Commercial Unit Utilities $ 3,602 $ 300
Parking $ 33 $ 32 $ 52 $ 51 $ 44 $ 21
Laundry 33 $ 3
Compl. Vac. (%) -6% -38.46% 1.96% 15.91% 109.52%
Current Vac. (%) -7%
# Vacant Units 1 Ann. Increase
# Occupied Units 13 Rate Proforma 3% 2025 Budget
Gas 20% $ 1,053 $ 5,265 $ 5,112
Electricity 20% $ 1,204 $ 6,019 $ 5,844
Water 10% $ 1,015 $ 10,148 $ 9,852
Sewer 10% $ 330 $ 3,300 $ 3,204
Total $ 3,602
First Year
Sourced from audited financial statements and budget
Laundry
Commercial Unit Utilities
188
B.

ATTACHMENT 1
8 Visitacion Avenue, Brisbane Proforma Date 1/2026
2026
1 1 2 3 4 5 6 7 8 9 10 11 12
INCOME 1/1/2026 2/1/2026 3/1/2026 4/1/2026 5/1/2026 6/1/2026 7/1/2026 8/1/2026 9/1/2026 10/1/2026 11/1/2026 12/1/2026 Y1 TOTAL Comments Gross Rent Potential Income $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 16,906 $ 202,872 Reserve Int. $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 349 $ 4,190 Commercial Unit Utilities $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 3,602 Parking $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Laundry 3% $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 33 Vac. (%) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (1,014) $ (12,172) GROSS EFFECTIVE INCOME $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 16,544 $ 198,524 EXPENSES (link to limits)
Common Area Utilities - PG&E, water/sewer, garbage 3.50% $ 2,071 $ 2,071 $ 2,071 $ 2,071 $ 2,071 $ 2,071 $ 2,071 $ 2,071 $ 2,071 $ 2,071 $ 2,071 $ 2,071 $ 24,852 Proforma Unit Utilities Paid By Landlord $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 2026 2025 Budget 2024 2023 2022 2021 Property General Liability Insurance $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 3,000 Nonprofit Insurace Alliance $ 24,852 $ 24,012 $ 23,549 $ 22,757 $ 25,639 $ 21,587 Property Insurance $ 1,107 $ 1,107 $ 1,107 $ 1,107 $ 1,107 $ 1,107 $ 1,107 $ 1,107 $ 1,107 $ 1,107 $ 1,107 $ 1,107 $ 13,285 Property Tax $ 63 $ 63 $ 63 $ 63 $ 63 $ 63 $ 63 $ 63 $ 63 $ 63 $ 63 $ 63 $ 750 Placeholder Rate change 1.97% 3.48% 5.42% Possessory Interest Tax $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Property Management 7.20% $ 1,239 $ 1,239 $ 1,239 $ 1,239 $ 1,239 $ 1,239 $ 1,239 $ 1,239 $ 1,239 $ 1,239 $ 1,239 $ 1,239 $ 14,868 Prodesse Property Group Stambaugh Insurance Cost Acquisition Price Ratio Lease-up Fee $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 83 $ 1,000 Assuming average rent of $2,000 and 1 turnover per yr Asset Management (HEART SV) $15,000 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 1,250 $ 15,000 $ 8,872.00 $ 2,850,000 0.003112982 City of Brisbane Monitoring fee $1,750 $ 146 $ 146 $ 146 $ 146 $ 146 $ 146 $ 146 $ 146 $ 146 $ 146 $ 146 $ 146 $ 1,750 Visitacion Garden Est. Insurance Cost Acquisition Price Staffing, Admin & Management Overhead (HEART) 15% $ 2,482 $ 2,482 $ 2,482 $ 2,482 $ 2,482 $ 2,482 $ 2,482 $ 2,482 $ 2,482 $ 2,482 $ 2,482 $ 2,482 $ 29,779 $ 13,285 $ 4,267,517 Bookkeeping $ 623 $ 623 $ 623 $ 623 $ 623 $ 623 $ 623 $ 623 $ 623 $ 623 $ 623 $ 623 $ 7,476 BRIDGE 2025 Budget Audit $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - HEART to provide Brisbane with project budget and actuals instead Unit Turnover & cleaning (not including renovation) $ 625 $ 625 $ 625 $ 625 $ 625 $ 625 $ 625 $ 625 $ 625 $ 625 $ 625 $ 625 $ 7,500 Contracts $ 1,558 $ 1,558 $ 1,558 $ 1,558 $ 1,558 $ 1,558 $ 1,558 $ 1,558 $ 1,558 $ 1,558 $ 1,558 $ 1,558 $ 18,696 BRIDGE 2025 Budget Landscaping/yard care $ 1,494 $ 1,494 $ 1,494 $ 1,494 $ 1,494 $ 1,494 $ 1,494 $ 1,494 $ 1,494 $ 1,494 $ 1,494 $ 1,494 $ 17,922 BRIDGE 2025 Budget Security Payroll/Contract - - - - - - - - - - - - -
Repairs and Maintenance $ 893 $ 893 $ 893 $ 893 $ 893 $ 893 $ 893 $ 893 $ 893 $ 893 $ 893 $ 893 $ 10,711 BRIDGE 2025 Budget Miscellaneous Operating and Maintenance Expenses 5% $ 827 $ 827 $ 827 $ 827 $ 827 $ 827 $ 827 $ 827 $ 827 $ 827 $ 827 $ 827 $ 9,926 SUB -TOTAL - EXPENSES $ 14,710 $ 14,710 $ 14,710 $ 14,710 $ 14,710 $ 14,710 $ 14,710 $ 14,710 $ 14,710 $ 14,710 $ 14,710 $ 14,710 $ 176,515

RESERVES
Replacement Reserve Deposit 10.0% $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 19,852 Operating Reserve Deposit $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - SUB-TOTAL - RESERVES $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 19,852 TOTAL OPERATING EXPENSES $ 16,364 $ 16,364 $ 16,364 $ 16,364 $ 16,364 $ 16,364 $ 16,364 $ 16,364 $ 16,364 $ 16,364 $ 16,364 $ 16,364 $ 196,367 NET OPERATING INCOME (INCOME minus OP EXPENSES) $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 2,157

HARD DEBT SERVICE
Debt A (1st position) $ -
Debt B (2nd position)
Debt C (3rd position)
TOTAL - HARD DEBT SERVICE $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - NET CASH FLOW (NOI minus DEBT SERVICE) $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 $ 2,157 Debt Service Coverage Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! $ 44,128.75
$ 4,963
$ 49,092
1st Year of Operations
1st Month of Operations (1-
Sourced from audited financial statements and budget
Property Insurance
Utilities (electricity, gas,
water, sewer)
189
B.

ATTACHMENT 1
8 Visitacion Avenue, Brisbane
Annual Increase Notes Calc Factors 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 INCOME
Gross Rent Potential Income 3.00% $ 202,872 $ 208,958 $ 237,382 $ 242,553 $ 261,910 $ 284,173 $ 302,703 $ 311,072 $ 336,692 $ 416,441 $ 428,934 $ 441,802 $ 455,056 $ 468,707 $ 482,769 $ 497,252 $ 512,169 $ 527,534 $ 543,360 $ 559,661 $ 576,451 $ 593,745 $ 611,557 $ 629,904 $ 648,801 $ 668,265 $ 688,313 $ 708,962 $ 730,231 $ 752,138 Reserve Int. 3.00% $ 4,190 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 $ 1,478 Commercial Unit Utilities 3.00% $ 3,602 $ 3,710 $ 3,821 $ 3,936 $ 4,054 $ 4,175 $ 4,301 $ 4,430 $ 4,563 $ 4,699 $ 4,840 $ 4,986 $ 5,135 $ 5,289 $ 5,448 $ 5,611 $ 5,780 $ 5,953 $ 6,132 $ 6,316 $ 6,505 $ 6,700 $ 6,901 $ 7,108 $ 7,322 $ 7,541 $ 7,767 $ 8,000 $ 8,240 $ 8,488 Parking 3.00% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Laundry 1.00% $ 33 $ 33 $ 34 $ 34 $ 34 $ 35 $ 35 $ 35 $ 36 $ 36 $ 36 $ 37 $ 37 $ 38 $ 38 $ 38 $ 39 $ 39 $ 39 $ 40 $ 40 $ 41 $ 41 $ 41 $ 42 $ 42 $ 43 $ 43 $ 44 $ 44 Vac. (%) -6.00% $ (12,172) $ (12,537) $ (14,243) $ (14,553) $ (15,715) $ (17,050) $ (18,162) $ (18,664) $ (20,202) $ (24,986) $ (25,736) $ (26,508) $ (27,303) $ (28,122) $ (28,966) $ (29,835) $ (30,730) $ (31,652) $ (32,602) $ (33,580) $ (34,587) $ (35,625) $ (36,693) $ (37,794) $ (38,928) $ (40,096) $ (41,299) $ (42,538) $ (43,814) $ (45,128) GROSS EFFECTIVE INCOME $ 198,524 $ 201,641 $ 228,471 $ 233,447 $ 251,761 $ 272,810 $ 290,354 $ 298,350 $ 322,566 $ 397,667 $ 409,552 $ 421,794 $ 434,402 $ 447,389 $ 460,766 $ 474,544 $ 488,735 $ 503,352 $ 518,407 $ 533,915 $ 549,887 $ 566,338 $ 583,283 $ 600,737 $ 618,714 $ 637,230 $ 656,302 $ 675,945 $ 696,179 $ 717,019 EXPENSES (link to limits)
Common Area Utilities - electricity & gas, water/sewer, etc. 3.00% $ 24,852 $ 25,598 $ 26,366 $ 27,157 $ 27,972 $ 28,811 $ 29,675 $ 30,565 $ 31,482 $ 32,427 $ 33,400 $ 34,402 $ 35,434 $ 36,497 $ 37,592 $ 38,719 $ 39,881 $ 41,077 $ 42,310 $ 43,579 $ 44,886 $ 46,233 $ 47,620 $ 49,048 $ 50,520 $ 52,035 $ 53,597 $ 55,204 $ 56,861 $ 58,566 Unit Utilities Paid By Landlord 3.00% $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Property General Liability Insurance 3.00% $ 3,000 $ 3,090 $ 3,183 $ 3,278 $ 3,377 $ 3,478 $ 3,582 $ 3,690 $ 3,800 $ 3,914 $ 4,032 $ 4,153 $ 4,277 $ 4,406 $ 4,538 $ 4,674 $ 4,814 $ 4,959 $ 5,107 $ 5,261 $ 5,418 $ 5,581 $ 5,748 $ 5,921 $ 6,098 $ 6,281 $ 6,470 $ 6,664 $ 6,864 $ 7,070 Property Insurance 3.00% $ 13,285 $ 13,683 $ 14,094 $ 14,517 $ 14,952 $ 15,401 $ 15,863 $ 16,339 $ 16,829 $ 17,334 $ 17,854 $ 18,389 $ 18,941 $ 19,509 $ 20,094 $ 20,697 $ 21,318 $ 21,958 $ 22,616 $ 23,295 $ 23,994 $ 24,713 $ 25,455 $ 26,219 $ 27,005 $ 27,815 $ 28,650 $ 29,509 $ 30,394 $ 31,306 Property Tax 2.00% $ 750 $ 765 $ 780 $ 796 $ 812 $ 828 $ 845 $ 862 $ 879 $ 896 $ 914 $ 933 $ 951 $ 970 $ 990 $ 1,009 $ 1,030 $ 1,050 $ 1,071 $ 1,093 $ 1,114 $ 1,137 $ 1,159 $ 1,183 $ 1,206 $ 1,230 $ 1,255 $ 1,280 $ 1,306 $ 1,332 Possessory Interest Tax 2.00% $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Property Management 7.20% $ 14,868 $ 15,314 $ 17,369 $ 17,750 $ 19,152 $ 20,764 $ 22,107 $ 22,719 $ 24,573 $ 30,325 $ 31,234 $ 32,171 $ 33,136 $ 34,130 $ 35,154 $ 36,209 $ 37,295 $ 38,414 $ 39,566 $ 40,753 $ 41,976 $ 43,235 $ 44,532 $ 45,868 $ 47,244 $ 48,661 $ 50,121 $ 51,624 $ 53,173 $ 54,768 Lease-up Fee 3.00% $ 1,000 $ 1,057 $ 1,201 $ 1,227 $ 1,325 $ 1,438 $ 1,532 $ 1,574 $ 1,704 $ 2,107 $ 2,170 $ 2,235 $ 2,302 $ 2,371 $ 2,443 $ 2,516 $ 2,591 $ 2,669 $ 2,749 $ 2,832 $ 2,917 $ 3,004 $ 3,094 $ 3,187 $ 3,283 $ 3,381 $ 3,483 $ 3,587 $ 3,695 $ 3,805 Asset Management (HEART SV) 3.50% $ 15,000 $ 15,000 $ 15,525 $ 16,068 $ 16,631 $ 17,213 $ 17,815 $ 18,439 $ 19,084 $ 19,752 $ 20,443 $ 21,159 $ 21,900 $ 22,666 $ 23,459 $ 24,280 $ 25,130 $ 26,010 $ 26,920 $ 27,862 $ 28,838 $ 29,847 $ 30,891 $ 31,973 $ 33,092 $ 34,250 $ 35,449 $ 36,689 $ 37,974 $ 39,303 $ 40,678 City of Brisbane Monitoring fee 3.00% $ 1,750 $ 1,750 $ 1,803 $ 1,857 $ 1,912 $ 1,970 $ 2,029 $ 2,090 $ 2,152 $ 2,217 $ 2,283 $ 2,352 $ 2,422 $ 2,495 $ 2,570 $ 2,647 $ 2,726 $ 2,808 $ 2,892 $ 2,979 $ 3,069 $ 3,161 $ 3,256 $ 3,353 $ 3,454 $ 3,557 $ 3,664 $ 3,774 $ 3,887 $ 4,004 $ 4,124 Staffing, Admin & Management (HEART) 3.00% 15% $ 29,779 $ 30,246 $ 34,271 $ 35,017 $ 37,764 $ 40,921 $ 43,553 $ 44,753 $ 48,385 $ 59,650 $ 61,433 $ 63,269 $ 65,160 $ 67,108 $ 69,115 $ 71,182 $ 73,310 $ 75,503 $ 77,761 $ 80,087 $ 82,483 $ 84,951 $ 87,492 $ 90,111 $ 92,807 $ 95,584 $ 98,445 $ 101,392 $ 104,427 $ 107,553 Bookkeeping 3.00% $ 7,476 $ 7,700 $ 7,931 $ 8,169 $ 8,414 $ 8,667 $ 8,927 $ 9,195 $ 9,470 $ 9,754 $ 10,047 $ 10,349 $ 10,659 $ 10,979 $ 11,308 $ 11,647 $ 11,997 $ 12,357 $ 12,727 $ 13,109 $ 13,502 $ 13,908 $ 14,325 $ 14,755 $ 15,197 $ 15,653 $ 16,123 $ 16,606 $ 17,105 $ 17,618 Audit 3.00% $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Unit Turnover & cleaning (not including renovation) 3.00% $ 7,500 $ 7,725 $ 7,957 $ 8,195 $ 8,441 $ 8,695 $ 8,955 $ 9,224 $ 9,501 $ 9,786 $ 10,079 $ 10,382 $ 10,693 $ 11,014 $ 11,344 $ 11,685 $ 12,035 $ 12,396 $ 12,768 $ 13,151 $ 13,546 $ 13,952 $ 14,371 $ 14,802 $ 15,246 $ 15,703 $ 16,174 $ 16,660 $ 17,159 $ 17,674 Contracts 3.00% $ 18,696 $ 19,256 $ 19,834 $ 20,429 $ 21,042 $ 21,673 $ 22,323 $ 22,993 $ 23,683 $ 24,393 $ 25,125 $ 25,879 $ 26,655 $ 27,455 $ 28,279 $ 29,127 $ 30,001 $ 30,901 $ 31,828 $ 32,783 $ 33,766 $ 34,779 $ 35,823 $ 36,897 $ 38,004 $ 39,144 $ 40,319 $ 41,528 $ 42,774 $ 44,057 Landscaping/yard care 3.00% $ 17,922 $ 18,460 $ 19,013 $ 19,584 $ 20,171 $ 20,777 $ 21,400 $ 22,042 $ 22,703 $ 23,384 $ 24,086 $ 24,808 $ 25,552 $ 26,319 $ 27,109 $ 27,922 $ 28,760 $ 29,622 $ 30,511 $ 31,426 $ 32,369 $ 33,340 $ 34,340 $ 35,371 $ 36,432 $ 37,525 $ 38,650 $ 39,810 $ 41,004 $ 42,234 Security Payroll/Contract 3.00% $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Repairs and Maintenance 3.00% $ 10,711 $ 11,032 $ 11,363 $ 11,704 $ 12,055 $ 12,417 $ 12,789 $ 13,173 $ 13,568 $ 13,975 $ 14,395 $ 14,826 $ 15,271 $ 15,729 $ 16,201 $ 16,687 $ 17,188 $ 17,704 $ 18,235 $ 18,782 $ 19,345 $ 19,926 $ 20,523 $ 21,139 $ 21,773 $ 22,426 $ 23,099 $ 23,792 $ 24,506 $ 25,241 Miscellaneous Operating and Maintenance Expenses 3.00% 5% $ 9,926 $ 10,082 $ 11,424 $ 11,672 $ 12,588 $ 13,640 $ 14,518 $ 14,918 $ 16,128 $ 19,883 $ 20,478 $ 21,090 $ 21,720 $ 22,369 $ 23,038 $ 23,727 $ 24,437 $ 25,168 $ 25,920 $ 26,696 $ 27,494 $ 28,317 $ 29,164 $ 30,037 $ 30,936 $ 31,861 $ 32,815 $ 33,797 $ 34,809 $ 35,851 SUB-TOTAL EXPENSES $ 176,515 $ 181,337 $ 192,711 $ 198,039 $ 207,248 $ 217,353 $ 226,597 $ 233,281 $ 244,674 $ 270,556 $ 278,757 $ 287,207 $ 295,915 $ 304,887 $ 314,132 $ 323,658 $ 333,475 $ 343,589 $ 354,012 $ 364,752 $ 375,819 $ 387,222 $ 398,973 $ 411,081 $ 423,558 $ 436,415 $ 449,663 $ 463,315 $ 477,383 $ 491,878

RESERVES
Replacement Reserve Deposit 10.00% $ 19,852 $ 20,164 $ 22,847 $ 23,345 $ 25,176 $ 27,281 $ 29,035 $ 29,835 $ 32,257 $ 39,767 $ 40,955 $ 42,179 $ 43,440 $ 44,739 $ 46,077 $ 47,454 $ 48,874 $ 50,335 $ 51,841 $ 53,391 $ 54,989 $ 56,634 $ 58,328 $ 60,074 $ 61,871 $ 63,723 $ 65,630 $ 67,595 $ 69,618 $ 71,702 Operating Reserve Deposit $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - SUB-TOTAL - RESERVES $ 19,852 $ 20,164 $ 22,847 $ 23,345 $ 25,176 $ 27,281 $ 29,035 $ 29,835 $ 32,257 $ 39,767 $ 40,955 $ 42,179 $ 43,440 $ 44,739 $ 46,077 $ 47,454 $ 48,874 $ 50,335 $ 51,841 $ 53,391 $ 54,989 $ 56,634 $ 58,328 $ 60,074 $ 61,871 $ 63,723 $ 65,630 $ 67,595 $ 69,618 $ 71,702 TOTAL OPERATING EXPENSES $ 196,367 $ 201,501 $ 215,558 $ 221,383 $ 232,424 $ 244,634 $ 255,632 $ 263,116 $ 276,931 $ 310,323 $ 319,712 $ 329,387 $ 339,355 $ 349,626 $ 360,208 $ 371,113 $ 382,348 $ 393,925 $ 405,853 $ 418,143 $ 430,807 $ 443,856 $ 457,301 $ 471,155 $ 485,430 $ 500,138 $ 515,294 $ 530,910 $ 547,000 $ 563,580 NET OPERATING INCOME (INCOME minus OP EXPENSES) $ 2,157 $ 140 $ 12,913 $ 12,063 $ 19,337 $ 28,176 $ 34,722 $ 35,234 $ 45,636 $ 87,344 $ 89,840 $ 92,407 $ 95,047 $ 97,764 $ 100,557 $ 103,431 $ 106,387 $ 109,427 $ 112,555 $ 115,771 $ 119,079 $ 122,482 $ 125,982 $ 129,582 $ 133,284 $ 137,092 $ 141,008 $ 145,036 $ 149,178 $ 153,438 HARD DEBT SERVICE Amount Rate Term
NONE
TOTAL HARD DEBT SERVICE $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - NET CASH FLOW (NOI minus DEBT SERVICE) $ 2,157 $ 140 $ 12,913 $ 12,063 $ 19,337 $ 28,176 $ 34,722 $ 35,234 $ 45,636 $ 87,344 $ 89,840 $ 92,407 $ 95,047 $ 97,764 $ 100,557 $ 103,431 $ 106,387 $ 109,427 $ 112,555 $ 115,771 $ 119,079 $ 122,482 $ 125,982 $ 129,582 $ 133,284 $ 137,092 $ 141,008 $ 145,036 $ 149,178 $ 153,438 Debt Service Coverage Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! DISTRIBUTION OF CASH FLOW T1 T2
Deferred developer's Fee - HEART SV $ 60,000 50% $ 1,079 $ 70 $ 6,457 $ 6,032 $ 9,669 $ 14,088 $ 17,361 $ 16,819 Residual Receipts Loans
New HEART Loan $ 262,350 53.3% $ 575 $ 37 $ 3,441 $ 3,215 $ 5,153 $ 7,509 $ 9,253 $ 9,816 $ 24,324 $ 46,555 $ 47,885 $ 49,253 $ 50,660 $ 52,108 $ 52,866 RDA of the City of Brisbane/Authority Loan 1 $ 1,514,182 32.8% $ 165 $ 11 $ 989 $ 924 $ 1,481 $ 2,157 $ 2,659 $ 2,820 $ 6,989 $ 13,376 $ 13,758 $ 14,151 $ 14,556 $ 14,971 $ 15,639 $ 33,917 $ 34,887 $ 35,884 $ 36,909 $ 37,964 $ 39,049 $ 40,165 $ 41,312 $ 42,493 $ 43,707 $ 44,955 $ 46,240 $ 47,560 $ 48,919 $ 50,316 RDA of the City of Brisbane/Authority Loan 2 $ 2,458,336 53.2% $ 268 $ 17 $ 1,605 $ 1,500 $ 2,404 $ 3,503 $ 4,316 $ 4,579 $ 11,346 $ 21,716 $ 22,337 $ 22,975 $ 23,631 $ 24,307 $ 25,390 $ 55,066 $ 56,640 $ 58,258 $ 59,923 $ 61,636 $ 63,397 $ 65,209 $ 67,072 $ 68,988 $ 70,960 $ 72,987 $ 75,072 $ 77,216 $ 79,421 $ 81,690 County of San Mateo (HOME funds) $ 294,999 6.4% $ 32 $ 2 $ 193 $ 180 $ 288 $ 420 $ 518 $ 549 $ 1,362 $ 2,606 $ 2,680 $ 2,757 $ 2,836 $ 2,917 $ 3,047 $ 6,608 $ 6,797 $ 6,991 $ 7,191 $ 7,396 $ 7,608 $ 7,825 $ 8,049 $ 8,279 $ 8,515 $ 8,758 $ 9,009 $ 9,266 $ 9,531 $ 9,803 New City Loan 350000 7.6% $ 38 $ 2 $ 229 $ 214 $ 342 $ 499 $ 615 $ 652 $ 1,615 $ 3,092 $ 3,180 $ 3,271 $ 3,364 $ 3,461 $ 3,615 $ 7,840 $ 8,064 $ 8,294 $ 8,531 $ 8,775 $ 9,026 $ 9,284 $ 9,549 $ 9,822 $ 10,103 $ 10,391 $ 10,688 $ 10,993 $ 11,307 $ 11,630 SCHEDULE OF OUTSTANDING DEBT (EOY) Principal Interest Rate Deferred developer's Fee - HEART SV $ 60,000 3.00% $ 60,721 $ 62,452 $ 57,795 $ 53,497 $ 45,434 $ 32,708 $ 16,329 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - New HEART Loan $ 262,350 3.00% $ 269,646 $ 277,479 $ 281,908 $ 286,564 $ 289,281 $ 289,642 $ 288,259 $ 286,314 $ 269,861 $ 231,177 $ 190,228 $ 146,682 $ 100,422 $ 51,326 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - RDA of the City of Brisbane/Authority Loan 1 $ 1,514,182 3.00% $ 1,559,442 $ 1,604,857 $ 1,649,294 1,693,796$ 1,737,740$ 1,781,008$ 1,823,775$ 1,866,381$ 1,904,817$ 1,936,867$ 1,968,534$ 1,999,809$ 2,030,679$ 2,061,133$ 2,090,919$ 2,102,427$ 2,112,966$ 2,122,508$ 2,131,025$ 2,138,486$ 2,144,863$ 2,150,124$ 2,154,237$ $ 2,157,170 $ 2,158,889 $ 2,159,359 $ 2,158,545 $ 2,156,410 $ 2,152,917 $ 2,148,027 RDA of the City of Brisbane/Authority Loan 2 $ 2,458,336 3.00% $ 2,531,818 $ 2,605,551 $ 2,677,696 2,749,946$ 2,821,292$ 2,891,540$ 2,960,973$ 3,030,145$ 3,092,549$ 3,144,583$ 3,195,996$ 3,246,771$ 3,296,890$ 3,346,333$ 3,394,693$ 3,413,377$ 3,430,487$ 3,445,979$ 3,459,805$ 3,471,920$ 3,482,273$ 3,490,814$ 3,497,492$ $ 3,502,254 $ 3,505,044 $ 3,505,808 $ 3,504,486 $ 3,501,020 $ 3,495,349 $ 3,487,409 County of San Mateo (HOME funds) $ 294,999 3.00% $ 303,816 $ 312,664 $ 321,322 $ 329,992 $ 338,553 $ 346,983 $ 355,315 $ 363,615 $ 371,104 $ 377,348 $ 383,517 $ 389,610 $ 395,624 $ 401,558 $ 407,361 $ 409,603 $ 411,656 $ 413,515 $ 415,174 $ 416,628 $ 417,870 $ 418,895 $ 419,697 $ 420,268 $ 420,603 $ 420,694 $ 420,536 $ 420,120 $ 419,439 $ 418,487 New City Loan $ 350,000 3.00% $ 360,462 $ 370,959 $ 381,231 $ 391,517 $ 401,675 $ 411,676 $ 421,562 $ 431,410 $ 440,295 $ 447,703 $ 455,023 $ 462,252 $ 469,387 $ 476,427 $ 483,312 $ 485,972 $ 488,408 $ 490,613 $ 492,582 $ 494,307 $ 495,781 $ 496,997 $ 497,947 $ 498,625 $ 499,023 $ 499,131 $ 498,943 $ 498,450 $ 497,642 $ 496,512 190
B.

ATTACHMENT 1
Item Year 13 Year 15
Long Term Physical Needs
Over The Term (Years 4
through 15)
Asphalt Pavement - Seal Coat and Striping 2,500
Concrete Pavement - Striping and Repairs 500
Concrete Walkway Repairs 2,000 4,000
Sewer and Storm Drain - Hydrojetting 3,000 3,000 36,000 Bark Ground Cover 2,000 2,000 24,000
Tree Trimming and Landscaping Repairs 6,150 6,150 73,800 Irrigation Systems 4,000
Wood Fencing 2,500 5,000
Wood Retaining Walls 2,500 5,000
Stucco Siding 7,500 15,000
Exterior Painting 21,000 42,000
Elastomeric Waterproofing 2,500 5,000
Built-Up Roofing With Mineral Surface Cap Sheet
Asphaltic Composition Shingle Roofing
Gutter Cleaning and Jetting 1,500 18,000
Common Area Painting 400
Common Area Carpet 720
Common Area Vinyl
Common Areas - Fixtures, Furnishing and Equipment
1,000 3,000
Central Gas-Fired 81-Gallon Water Heaters 10,000
Central Gas-Fired 91-Gallon Water Heaters 15,000
Central Gas-Fired 100-Gallon Water Heaters 15,000
Gas-Fired Forced Air Unit
Gas-Fired Wall Heaters 1,200 13,200
Fire Sprinklers - Five Year Backflow Testing 3,500 7,000 Carpet Flooring 3,700 3,700 44,400
Vinyl Flooring 560 1,120 8,960
Window Coverings 1,000 1,000 12,000
Kitchen and Bathroom Cabinets 10,000 110,000
Kitchen and Bathroom Countertops/Sinks 2,500 5,000 40,000 Refrigerator 900 1,800 14,400
Range / Stove 850 850 10,200
Range Hood 100 200 1,600
Tub/Shower Enclosures - Refurbishment or Replacement
3,000 33,000
$ 78,420 $ 65,320
FV 3% $ 111,808 $ 98,802
Total
Average Annual Cost Per Unit Uninflated
Average Annual Cost Per Unit Inflated
$ 37,554 $ 46,701 $ 42,026 $ 58,481 $ 49,130 $ 73,386 $ 96,496 $ 51,330 $ 48,877 $ 52,036 $ 56,089 $ 56,480 $3,791
$4,602
Fannie Mae 2019, Physical Needs over the Term: Page 1 of 1 Cumulative Total 142,040 179,594 226,295 268,321 326,802 375,932 449,319 545,815 597,144 646,021 698,057 754,147 811,120 867,600 966,402 $226,295 $740,108 Total, Inflated all pages 142,040 37,554 46,701 42,026 58,481 49,130 73,386 96,496 51,330 48,877 52,036 98,802 138.42% 142.58% 146.85%
56,089 56,973 56,480
$222,520 $573,680
Annual Inflation Factor @ 3.0% 100.00% 103.00% 106.09% 109.27% 112.55% $78,460 $40,520 $37,460 $38,720 $40,520 $39,960
115.93% 119.41% 122.99% 126.68% 130.48% 134.39% 151.26% $ 40,520 $ 38,460
$796,200 $142,040 $36,460 $44,020 $38,460 $51,960 $42,380 $61,460 $ 796,200 $ 142,040 $ 36,460 $ 44,020 $ 38,460 $ 51,960 $ 42,380 $ 61,460 $ 78,460 $ 40,520 $ 37,460 $ 38,720 $38,460 $65,320
14 Each $3,000.00 $42,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 9,000 20 Units $100.00 $2,000 100 100 200 100 100
3,000 3,000 3,000
200 100 100 200 100 100 200 100 400
15 Units $850.00 $12,750 850 850 850 850 850 850 850 850 850 850 2,550 20 Units $900.00 $18,000 900 900 1,800 900 900
850 850 850
1,800 900 900 1,800 900 900 1,800 900 3,600
20 Units $2,500.00 $50,000 2,500 2,500 5,000 2,500 2,500 5,000 2,500 2,500 5,000 2,500 10,000 14 Units $10,000.00 $140,000 10,000 10,000 10,000 10,000 10,000 5,000 2,500 2,500
10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 30,000 1,120 560 560
1,000 1,000 1,000 1,000 1,000 3,000
1,120 560 560
15 LS $1,000.00 $15,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 3,700 3,700 3,700 11,100
20 Units $560.00 $11,200 560 560
3,700 3,700 3,700 3,700 3,700 3,700
1,120 560 560 1,120 560 2,240
Dwelling Units
30 Units $1,850.00 $55,500 3,700 3,700 3,700 3,700
1,200 3,600
3 Each $3,500.00 $10,500
1,200 1,200 1,200 1,200 1,200 1,200
3,500 3,500 3,500
15,000
3,500
14 Each $1,200.00 $16,800 1,200 1,200 1,200 1,200 1,200 1 Each $3,500.00 $3,500 3,500
1 Each $15,000.00 $15,000
1 Each $15,000.00 $15,000 15,000
10,000
Electrical / Mechanical
1 Each $10,000.00 $10,000
3 LS $1,000.00 $3,000 1,000
80 SF $4.00 $320 320
1,000
320
360 SF $3.00 $1,080 360 360 360
400 SF $2.00 $800 400 400
360
400
15 LS $1,500.00 $22,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 4,500 7,400 SF $8.00 $59,200 59,200
1,500 1,500 1,500
59,200
2,100 SF $8.00 $16,800 16,800 16,800
1,500 SF $5.00 $7,500 2,500
21,000
2,500 2,500
42 Units $1,500.00 $63,000 21,000
7,500
21,000
Architectural
2 LS $7,500.00 $15,000
2 LS $2,500.00 $5,000 2,500
2,500
6,150 6,150
2,000
2 LS $2,500.00 $5,000
2 LS $2,000.00 $4,000 2,000
2,000 6,000
15 LS $6,150.00 $92,250 6,150
2,000 2,000 2,000 2,000 2,000 2,000
6,150 6,150 6,150 6,150 6,150 6,150 6,150 6,150 6,150 6,150 18,450 2,000
3,000 3,000 9,000
15 LS $2,000.00 $30,000 2,000 2,000 2,000
3,000 3,000 3,000 3,000 3,000 3,000
2,000 2,000 2,000
15 EA $3,000.00 $45,000 3,000 3,000 3,000 3,000 3,000
250 250
2 LS $2,000.00 $4,000
30 EA $25.00 $750 250 250
1,250
Site
7,500 SF $0.50 $3,750 1,250 1,250 1,250
Year 11 Year 12 Year 14
Short Term Physical Needs
Over The Term (Years 1
through 3)
Year
3 Year 4 Year 5 Year 6 Year 7 Year 8

ENCLOSURE P
TABLE D: PHYSICAL NEEDS OVER THE TERM
Project Visitacion Garden ApartmentsNum. of Units 14 Family Y Quantity Unit Unit Cost Total Cost
Year
1 Year
2 Address 8 Visitacion AvenueNum. of Bldgs 7 Elderly Y
Brisbane, CA 94005Date March 5, 2024Term 15
Year 9
Year
10 191
B.

ATTACHMENT 1
Replacement Reserve Schedule
Interest
3%
1 2026 $0 $454,020 $8,507 170,448$
2 2027 $292,079 $19,852 $8,762 $0
3 2028 $320,694 $20,164 $9,621 $0
4 2029 $350,479 $22,847 $9,254 $42,026 0
5 2030 $340,553 $23,345 $8,462 $58,481 0
6 2031 $313,879 $25,176 $7,942 $49,130 0
7 2032 $297,867 $27,281 $6,734 $73,386 0
8 2033 $258,496 $29,035 $4,860 $96,496 0
9 2034 $195,896 $29,835 $4,337 $51,330 0
10 2035 $178,738 $32,257 $3,896 $48,877 0
11 2036 $166,014 $39,767 $3,419 $52,036 0
12 2037 $157,163 $40,955 $3,032 $56,089 0
13 2038 $145,062 $42,179 $998 $111,808
14 2039 $76,431 $43,440 $599 $56,480 0
15 2040 $63,989 $44,739 $0 $98,802
16 2041 $9,926 $46,077 $298 $0
17 2042 $56,300 $47,454 $1,689 $0
18 2043 $105,444 $48,874 $3,163 $0
19 2044 $157,481 $50,335 $4,724 $0
20 2045 $212,540 $51,841 $6,376 $0
21 2046 $270,757 $53,391 $8,123 $0
22 2047 $332,271 $54,989 $9,968 $0
23 2048 $397,228 $56,634 $11,917 $0
24 2049 $465,779 $58,328 $13,973 $0
25 2050 $538,081 $60,074 $16,142 $0
26 2051 $614,297 $61,871 $18,429 $0
27 2052 $694,597 $63,723 $20,838 $0
28 2053 $779,158 $65,630 $23,375 $0
29 2054 $868,163 $67,595 $26,045 $0
30 2055 $961,802 $69,618 $28,854 $0
2055 $1,060,274
Period Year Balance Funding Expense Notes
192
B.

ATTACHMENT 1
2905 S. El Camino Real, San Mateo, CA 94403 | (650) 204-5640 | heartofsmc.org February 24, 2026
Julia Ayres, Principal Planner
50 Park Place
Brisbane, CA 94005
Re: Visitacion Garden Senior Apartment, 8 Visitacion Avenue/3 Inyo Street, Brisbane, CA (the "Project")
Dear Ms. Ayres,
This letter sets forth our revised proposal to enter into a new ground lease and management agreement for the Project. The purpose of this letter is to summarize the material terms of our mutual understanding regarding the ground lease and management of the Project by the Housing Endowment and Regional Trust of San Mateo County (“HEART” or “Buyer”) and its assignee, HEART-SV. The landowner is referred to as the “City.” For clarity, references to “acquisition” below refer to Buyer’s acquisition of the Project’s leasehold interest and improvements pursuant to the ground lease.

1. Debt Assumption HEART is willing to assume the existing City and County of San Mateo loans (“Debt”) via new loan agreements on the condition that an appraisal demonstrates that the leasehold interest and improvements have a value equal to or greater than the Debt. The current total Debt is $4,289,188. HEART engaged Bowery Valuation to appraise the Project and the valuation, $3,290,000, is less than the Debt. As a result, HEART requests a restructuring of the Debt through new loan agreements in the following amounts: $3,062,564 for the City loan and $227,436 for the County of San Mateo loan.

2. Acquisition Price The restructured Debt totaling $3,290,000 shall constitute the “Acquisition Price” of the Project leasehold interest and improvements.

3. Due Diligence Period HEART conducted a full due diligence review, including an appraisal, a capital needs assessment, a Phase I environmental report, three reroofing quotes, and two exterior painting quotes.

4. Assignment The City acknowledges that, immediately prior to closing, Buyer will assign the Project acquisition to HEART-SV, an affiliate of HEART, which will take title.

5. Financing Based on the information provided in the Request for Proposals and by the current Project operator, HEART believes that existing rental revenue is sufficient to cover general operating expenses. However, outstanding repairs and future capital needs identified in the capital ATTACHMENT 2

2905 S. El Camino Real, San Mateo, CA 94403 | (650) 204-5640 | heartofsmc.org needs assessment exceed projected revenues. To address this gap, HEART proposes a combination of a new City loan and a HEART loan, each in the amount of $390,250.

6. Rent Restriction HEART accepts and proposes to maintain the existing rent restrictions, while implementing subsidy “stacking” to ensure long-term project sustainability. HEART proposes one modification: replacing two 40% AMI units with one 30% AMI unit and one 50% AMI unit. This will allow rents to align with the State Department of Housing and Community Development (HCD) published rent levels.

To maintain viability, HEART intends to rent four units to incomequalified households at 80% AMI. However, Health & Safety Code §§50053 and 50052.5 requires that units restricted at 80% AMI be rented at 60% AMI rent levels. To serve 80% AMI households at appropriate rents, these units must instead be deed restricted at 120% AMI. Notwithstanding the 120% deed restriction level, HEART will continue to income-qualify and target tenants for these four units at 80% AMI. A table summarizing the proposed restrictions, target occupancy, and subsidy stacking is shown below.

Proposed Deed Restrictions
City Deed Restrictions County Deed
Restrictions
AMI Income Target Rent Stacked
30% 3 3 3
40% 0 0
50% 1 1
60% 6 6 1
80% 0 4 1
120% 4 0
Total 14 14 5

7. Current Tenants HEART will honor all existing leases and designated AMI rent levels for tenants currently residing at the Project.

8. Affordability Because the City’s original funding for the Project came from the former Redevelopment Agency, HEART understands that H&SC dictates the method for calculating rents for units regulated by the City deed restriction. HEART and the City further acknowledge that if City and County subsidies are stacked, five units will be subject to the lesser of HUD HOME Income Limits or H&SC-based limits.

9. Property Management HEART believes that the Project’s prior financial challenges stemmed in part from reliance on part-time, on-site management and maintenance. HEART proposes utilizing a capable, responsive off-site ATTACHMENT 2

2905 S. El Camino Real, San Mateo, CA 94403 | (650) 204-5640 | heartofsmc.org property management team to ensure both quality service for tenants and proper maintenance. Should this approach fall short, HEART is willing to adjust its strategy.

10. Repairs and Upgrades HEART proposes a $434,000 construction budget to address identified repairs needed over the next five years. In addition, HEART will capitalize a $100,000 reserve fund and contribute 10% of gross income annually for the first four years, beginning with approximately $21,000 in the first year. To fund the ongoing repair needs, HEART will increase the replacement reserve deposit to 15% of gross income annually in year five and again to 20% of gross income annually in year sixteen. In year twenty-four, HEART will reduce the replacement reserve deposit to 15% of gross income annually. The combination of the construction budget, capitalized reserves, and the annual deposits to the reserve is sufficient to address all repairs identified in the capital needs assessment.

11. Non-Binding Effect This proposal reflects the mutual understanding of the parties with respect to the general terms and conditions of the proposed transaction.

Except for provisions expressly intended to be binding (if any), this proposal is non-binding and subject to the negotiation and execution of mutually acceptable definitive agreements.

Thank you for considering this proposal. We look forward to further discussions and to working together to preserve and strengthen affordable housing in the City of Brisbane.

Sincerely,
Armando F. Sanchez
Executive Director.

ATTACHMENT 2

APPRAISAL REPORT
A 14 Unit Affordable Housing Property
8 Visitacion Avenue
Brisbane, CA 94005
Multifamily Building

REQUESTED BY
Audrey Washington
HEART of San Mateo County
2905 South El Camino Real
San Mateo, CA 94403

DATE OF VALUE
Hypothetical : January 20, 2026

PREPARED BY
Bryson
Young, MAI
Sam
Cimino
ATTACHMENT 3
425 Page Mill Road, 2nd Floor PMB 2035
Palo Alto, CA 94306
January 28, 2026
Audrey Washington
HEART of San Mateo County
2905 South El Camino Real
San Mateo, CA 94403
Re: Appraisal File No. 2600045589
Multifamily Building
8 Visitacion Avenue
Brisbane, CA 94005
Dear Audrey Washington,
In accordance with your request, we have completed an appraisal of the subject located at 8 Visitacion Avenue, Brisbane, CA 94005 for the purpose of advancing an opinion of the Hypothetical Market Value of the Leasehold Interest in the subject.

The subject is a 2-story, walk-up, multifamily building consisting of 14 residential units with 19,998 square feet of gross building area. The property is currently operating as an affordable senior housing project property and consists of twelve, 1 BR / 1 BA units and two, 2 BR / 1 BA units. All of the units are deed restricted. Upon transfer of the property, HEART will update the rent restriction levels to include three 30% AMI units, one 50% AMI unit, six 60% AMI units, and four 120% AMI units. The property is currently encumbered by a ground lease with The Redevelopment Agency of the City of Brisbane. The existing ground lease expires in 2028. Based on the provided ground lease, the rental payments consist of any surplus cash associated with the operation of the property; however, there have reportedly never been any payments on the ground lease as there has never been surplus cash over the life of the lease. The current owner, BRIDGE, intends to sell the property to HEART of San Mateo County.

We note that this is not a traditional sale as HEART will essentially be assuming the remaining debt on the property, which totals $4,285,886. HEART is currently finalizing a new ground lease which will be $1 per year that will commence upon the existing ground lease expiration. The project also features a senior community center that is subleased for $1 per year. We note this sublease expires along with the existing ground lease and will be renewed upon expiration for $1 to match the 55 year term of the new ground lease. This community center provided a small amount of utility reimbursement income and will only be leased to this tenant for 55 years. We have included this reimbursement income within our analysis but the space is largely treated as amenity space. Overall, the property is considered to be in average condition. We note that at the request of the client, we have provided the hypothetical value of the subject property as if the subject is encumbered by the new ground lease and is leased at the proposed max affordable rents.

The subject is situated on a 17,138 square foot parcel in an (NCRO-2) Neighborhood Commercial zone and is identified in the city of Brisbane, San Mateo County tax maps as APN 007-221-180. The subject property is located along Visitacion Avenue in the Brisbane neighborhood of Daly City Brisbane.

Our analyses, opinions and conclusions were developed, and this report has been prepared, in conformance with the Standards of Professional Practice and Code of Professional Ethics of the Appraisal Institute, the Uniform Standard of Professional Appraisal Practice (USPAP), HEART of San Mateo County's appraisal guidelines, and applicable state appraisal regulations. To report the assignment results, we use the Appraisal Report option of Standards Rule 2-2(a) of USPAP.

ATTACHMENT 3
425 Page Mill Road, 2nd Floor PMB 2035
Palo Alto, CA 94306
Ms. Washington

January 28, 2026
After carefully considering all available information and factors affecting value, our opinion is:

Final Value Conclusion
Value Premise Date of Value Interest Appraised Value Conclusion As Is Market Value January 20, 2026 Leasehold Interest $3,290,000 As with any appraisal, the reader is reminded that the opinion of value is only valid as of the effective date(s). Our conclusions are predicated on the attitudes and expectations prevalent in the subject submarket and market on the date(s) of value. Bowery Valuation continuously monitors the markets where we are active and appropriate steps have been taken to ensure our analysis is based on the most recent, relevant data available. Changes in market conditions or associated with other unanticipated future events, could impact value.

ATTACHMENT 3
425 Page Mill Road, 2nd Floor PMB 2035
Palo Alto, CA 94306
Ms. Washington

January 28, 2026
The value conclusions are subject to the following Extraordinary Assumptions1. We note the use of this/these extraordinary assumption(s) may have affected the assignment results. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions:
• None.

The value conclusions are based on the following Hypothetical Conditions 2 . We note the use of this/these hypothetical conditions(s) may have affected the assignment results:
• We note the property is currently encumbered by a ground lease that expires in 2028. HEART intends to renew this ground lease at a rate of $1 per year upon expiration. We have valued the property as if it is already encumbered by the new ground lease.
• We note there is a community center lease that is coterminous with the ground lease that expires in 2028.

HEART intends to renew this sublease for $1 per year with expense reimbursements for their share of utilities. We have valued the property as if the new lease is in place. • HEART intends to apply for a new regulatory agreement with new maximum allowable rents. At the request of the client, we have valued the property as if the tenants are leasing the units at the proposed maximum allowable rents.

The opinion of value expressed herein is subject to the certification, assumptions and limiting conditions, and all other information contained in the following written appraisal report.

Thank you for the opportunity to serve you.

Sincerely,
Bryson Young, MAI
Senior Managing Director
Certified General Real Estate Appraiser
CA License No. AG044713
[email protected]
(650) 334-5404
Sam Cimino
Vice President
Certified General Real Estate Appraiser
CA License No. AG3007042
[email protected]
(408) 592-0697
1 The definition of Extraordinary Assumptions can be found in the Glossary of Terms, which is located in the Addenda. 2 The definition of Hypothetical Conditions can be found in the Glossary of Terms, which is located in the Addenda.

ATTACHMENT 3
Summary of Salient Facts & Conclusions
8 Visitacion Avenue, Brisbane, CA
Salient Facts
Property
Property Name A 14 Unit Affordable Housing Property
Address 8 Visitacion Avenue
City Brisbane
State California
County San Mateo
ATTACHMENT 3
APN 007-221-180
Highest and Best Use – Vacant Affordable Housing – Deed Restricted Highest and Best Use – As Improved Affordable Housing – Deed Restricted Date of Inspection January 20, 2026
Report Date January 28, 2026
Effective Date(s) of Value
Hypothetical January 20, 2026
Building Characteristics
Property Type Multifamily
GBA 19,998 sq. ft.

Year Built 2000
No. of Floors 2
Residential Units 14
Occupancy 100%
Condition Average
Total Economic Life 50 years
Effective Age 20 years
Remaining Economic Life 30 years
Site Characteristics
Site Area 17,138 sq. ft.

Site Shape Rectangular
Topography Generally level at street grade
Zoning (NCRO-2) Neighborhood Commercial
Flood Zone Zone X
ATTACHMENT 3
Financial Indicators
Total Per Unit
Potential Gross Income $324,215 $23,158
Effective Gross Income $317,731 $22,695
Operating Expense Ratio 28% -
Net Operating Income $230,072 $16,434
Capitalization Rate 7.00% -
Stabilized Residential Occupancy 98% -
Income Capitalization Approach As Is $3,290,000 $235,000 Sales Comparison Approach As Is $3,150,000 $225,000
Value Conclusion
Final Value Conclusion
Value Premise Date of Value Interest Appraised Value Conclusion As Is Market Value January 20, 2026 Leasehold Interest $3,290,000 The value conclusions are subject to the following Extraordinary Assumptions3. We note the use of this/these extraordinary assumption(s) may have affected the assignment results. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions:
• None.

The value conclusions are based on the following Hypothetical Conditions 4 . We note the use of this/these hypothetical conditions(s) may have affected the assignment results:
• We note the property is currently encumbered by a ground lease that expires in 2028. HEART intends to renew this ground lease at a rate of $1 per year upon expiration. We have valued the property as if it is already encumbered by the new ground lease.
• We note there is a community center lease that is coterminous with the ground lease that expires in 2028.

HEART intends to renew this sublease for $1 per year with expense reimbursements for their share of utilities. We have valued the property as if the new lease is in place. • HEART intends to apply for a new regulatory agreement with new maximum allowable rents. At the request of the client, we have valued the property as if the tenants are leasing the units at the proposed maximum allowable rents.
3 The definition of Extraordinary Assumptions can be found in the Glossary of Terms, which is located in the Addenda. 4 The definition of Hypothetical Conditions can be found in the Glossary of Terms, which is located in the Addenda.

ATTACHMENT 3
Table of Contents
Introduction........................................................................................................................................................................... 1 Purpose & Date of Value.................................................................................................................................................. 1 Identification of the Client................................................................................................................................................ 1 Intended Use & User ........................................................................................................................................................ 1 Property Rights Appraised............................................................................................................................................... 1 Property History ................................................................................................................................................................ 1 Exposure Time .................................................................................................................................................................. 2 Marketing Time................................................................................................................................................................. 2 General Assumptions ....................................................................................................................................................... 2 Definition of Market Value ............................................................................................................................................... 3 Scope of the Appraisal..................................................................................................................................................... 3 Data Sources ..................................................................................................................................................................... 3 Neighborhood & Demographic Overview ........................................................................................................................ 5 Zoning Summary ................................................................................................................................................................10 Assessed Value & Real Estate Taxes ................................................................................................................................. 11 Current Tax Liability........................................................................................................................................................11 Projected Tax Liability ....................................................................................................................................................12 Site Description ..................................................................................................................................................................13 Ground Lease..................................................................................................................................................................14 Description of Improvements............................................................................................................................................15 Building Description.......................................................................................................................................................15 Summary..........................................................................................................................................................................17 Floor Plans.......................................................................................................................................................................18 Submarket Analyses...........................................................................................................................................................20 Daly City/Brisbane: Multifamily Submarket Analysis ...................................................................................................20 Max Allowable Rents ......................................................................................................................................................26 Highest & Best Use.............................................................................................................................................................28 As Vacant.........................................................................................................................................................................28 As Improved....................................................................................................................................................................29 Appraisal Valuation Process ..............................................................................................................................................30 Income Capitalization Approach ......................................................................................................................................31 Income Analysis ..............................................................................................................................................................31 Operating Expense Analysis..........................................................................................................................................38 Stabilized Income & Expenses.......................................................................................................................................43 Income Capitalization.....................................................................................................................................................44 ATTACHMENT 3
Capitalization Rate Conclusion......................................................................................................................................44 Sales Comparison Approach.............................................................................................................................................46 Reconciliation & Final Value ..............................................................................................................................................51 Certification.........................................................................................................................................................................53 Addenda .............................................................................................................................................................................54 Contingent & Limiting Conditions ................................................................................................................................54 Subject Property Photos.................................................................................................................................................57 Map Gallery .....................................................................................................................................................................64 Rent Roll & Financial Statements...................................................................................................................................66 Provided Documents......................................................................................................................................................67 Insurable Replacement Cost........................................................................................................................................146 Insurable Value .............................................................................................................................................................147 Comparable Sales Outline...........................................................................................................................................148 San Mateo County Area Analysis ................................................................................................................................154 San Francisco: Multifamily Market Analysis................................................................................................................160 Qualifications ................................................................................................................................................................166 Licenses .........................................................................................................................................................................167 Letter of Engagement ..................................................................................................................................................169 Glossary of Terms .........................................................................................................................................................176 ATTACHMENT 3
Introduction
Bowery Valuation 2600045589 1
Introduction
Purpose & Date of Value
Value Premise Date of Value Interest Appraised
Hypothetical Market Value January 20, 2026 Leasehold Interest Identification of the Client
HEART of San Mateo County has engaged Bowery Valuation and is Bowery Valuation’s client for this assignment.

Intended Use & User
The Intended Use is for loan underwriting.

The Intended User is HEART of San Mateo County. This appraisal is not intended for any other use or user. No party or parties other than the intended user may use or rely on the information, opinions and conclusions contained in this report.

Property Rights Appraised5
In this appraisal we provide an opinion of Hypothetical Market Value of the leasehold interest.

Property History
According to public record, the owner of 8 Visitacion Avenue is BRIDGE Housing Corporation. The subject property has, to the best of our knowledge, not sold within the past three years.

We are aware of the contract for HEART to purchase this asset from BRIDGE Housing Corporation. This is not a traditional sale and is being treated more as a transfer of the existing remaining debt on the property. According to the buyer, the City of Brisbane sent out a call for offers of the improvements as BRIDGE wanted to offload the property. There were no other offers to purchase the asset. We are not aware of any additional bids, offers, or options to purchase for this asset.

We note the property is currently in the process of transferring ownership; however, this is not a typical sale. The property is ground leased and the current owner of the improvements wished to move on from the property. The City of Brisbane put out a call for offers and the buyer was the only interested party. We note that this is an assumption of existing debt, and not a true purchase. The remaining debt is $4,285,886. We note the buyer, HEART, ordered this appraisal in order to determine the difference between the outstanding debt and the value of the property, if any. This was done in order to try to gain a debt forgiveness of the difference between the two. We note our concluded value is $3,290,000, which is well below the existing debt. 5 The definitions of the various interests appraised can be found in the Glossary of Terms, which is located in the Addenda.

ATTACHMENT 3
Introduction
Bowery Valuation 2600045589 2
Exposure Time6
It is our opinion that given the current economic conditions, an exposure time for the subject property is between 6 months and 9 months. This conclusion is predicated on interviews with local brokers and other real estate industry sources, on information obtained in the verification process of recent sale transactions for similar properties, and our analysis of supply and demand forces in the local market. The value reported herein presumes such an exposure time.

Marketing Time7
It is our opinion that given the current economic conditions, a marketing time for the subject property is between 6 months and 9 months. This conclusion considers the property’s relative market position, as well as our market value conclusion and it is predicated on interviews with brokers, other real estate industry sources and on information obtained in the verification process.

General Assumptions
Various estimates of gross building area/gross leasable area and net rentable area were provided by the owner/client and/or their agents. This opinion of value reported herein assumes that the data provided are the most recent and accurate.

We note that our appraisers are not experts in the following domains:
• Technical Environmental Inspections: No Environmental Site Assessment report was provided in conjunction with this appraisal. If a report is commissioned and there are any environmental issues uncovered, they could affect our opinion of value reported. We recommend the services of a professional engineer for this purpose.
• Zoning Ordinances: We recommend an appropriately qualified land use attorney if a definitive determination of compliance is required.
• Building Inspections: We recommend an inspection by a building engineer or professional property inspector if a more thorough examination of the subject’s improvements is required. Any immediate expenditures that a trained professional may determine are needed, could affect our opinion of value reported.
• Easements, Encroachments, and Restrictions: Within our research and analysis we will examine the tax map, deed, legal description, and survey (if available) to determine the existence of any easements, encroachments or restrictions impacting the subject property. However, further research required to determine whether or not such restrictions exist is beyond the scope of this appraisal assignment. Deed restrictions are a legal matter and only a title examination by an attorney or title company can uncover such restrictive covenants. Thus, we recommend a title search to definitively determine if any such restrictions do exist.
• Building Health and Fire Codes: Our valuation assumes there are no known code violations. 6 The definition of Exposure Time can be found in the Glossary of Terms, which is located in the Addenda. 7 The definition of Marketing Time can be found in the Glossary of Terms, which is located in the Addenda.

ATTACHMENT 3
Introduction
Bowery Valuation 2600045589 3
Definition of Market Value8
The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. buyer and seller are typically motivated;

2. both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest;

3. a reasonable time is allowed for exposure in the open market;

4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Scope of the Appraisal
Within the course of this assignment, we have:
• Inspected the building facade, exterior entrance, common areas and stairs of the subject property. • Researched and investigated the location in terms of its economic activity, development patterns, and future trends and related their impact in the market.
• Determined the Highest and Best Use of the subject property based on an analysis of all relevant factors. • Conducted a market survey of rent and vacancy levels of similar buildings. • Analyzed the subject's operating expense history and projections, as well as expense reports of comparable properties, in order to accurately project the stabilized cash flow. • Projected the net operating income under stabilized operation and applied a market-derived capitalization rate to develop an opinion of value by the income capitalization approach. • Researched and analyzed sales of competitive assets and applied the techniques of the sales comparison approach in providing an opinion of value.
• Advanced an opinion of the Hypothetical market value of the identified interest.

Data Sources
The data contained within this appraisal was compiled from market analysis utilizing the following sources (unless otherwise noted): the City Tax Assessor, state and county tax records, the Zoning Board, Claritas, CoStar, Attom, Federal Reserve, and FEMA. The subject photos were taken by Sam Cimino on 01/20/2026. When possible, we have confirmed the reported data with parties to the transactions or those who are intimately familiar with their critical details.
8 Code of Federal Regulations, Title 12, Chapter I, Part 34.42[h]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, April 9, 2018, page 77472
ATTACHMENT 3
Introduction
Bowery Valuation 2600045589 4
Resource Verification
Data Source/Verification
Site Size Public Record
Excess/Surplus Land Tax Map
Gross Size/Units Public Record
Residential SF Appraiser's Estimate; Inspection
Number of Buildings Inspection
Amenities Inspection
Deferred Maintenance Inspection
Area Analysis Bureau of Labor Statistics
Income Data Owner; Market Forecast
Expense Data Owner; Expense Comparables
Comparable Rental Data CoStar; Primary Source
Comparable Sales Data CoStar; Public Record; Primary Source ATTACHMENT 3
Neighborhood & Demographic Overview
Bowery Valuation 2600045589 5
Neighborhood & Demographic Overview
Source: Google Maps
Brisbane at a Glance
Brisbane is a residential and semi-suburban community located in San Mateo County, California, approximately 10 miles south of Downtown San Francisco. The area features established neighborhoods, light industrial and commercial corridors, and preserved open-space areas, reflecting a mix of suburban development and low-density residential character. Streets are primarily lined with single-family homes, while smaller clusters of duplexes and townhomes are located near local commercial and service areas. Large-lot rural properties are limited, consistent with the community’s suburban and semi-urban setting, though significant hillside open space and protected natural areas remain throughout the area.

Retail activity is concentrated along primary corridors such as Visitacion Avenue and Bayshore Boulevard, featuring grocery stores, restaurants, coffee shops, banks, and neighborhood service businesses. Additional retail and dining options are available in nearby communities including South San Francisco and Daly City, while larger regional shopping destinations such as Serramonte Center and downtown San Francisco are accessible within a short drive.

Recreational amenities in Brisbane include community parks and extensive open-space preserves, offering walking trails, scenic overlooks, and outdoor recreation opportunities. The area is adjacent to larger regional parks and waterfront areas, providing access to hiking, biking, and outdoor activities. Community facilities support local programs and events, and public open spaces contribute to neighborhood recreation and gatherings.

ATTACHMENT 3
Neighborhood & Demographic Overview
Bowery Valuation 2600045589 6
Brisbane benefits from strong regional and local transportation access. Major corridors include Bayshore Boulevard and U.S. Highway 101, while nearby interstates provide efficient connections throughout the San Francisco Peninsula and the broader Bay Area. Public transportation is available via SamTrans bus service and nearby BART and Caltrain stations, linking the community to major employment centers and transit hubs. Passenger rail service is accessible through Caltrain, offering connections throughout the Peninsula and to San Francisco and San Jose.

Air travel is served by San Francisco International Airport (SFO) and Oakland International Airport (OAK), providing extensive domestic and international flight options.

Population
The following demographic profile, including all of the following charts, were created with data from the U.S. Census Bureau, reflecting the subject's municipality and point of comparison. As of the 2010 Census, Brisbane had a population of 4,282 people and 1,821 households. 2020 Census data shows its population has grown by 1.3% per year to 4,851 residents.

Population and Household Growth
Area 2010 Census 2020 Census
Annual %
Change 2025 Forecast
Population Brisbane 4,282 4,851 1.3% 5,182
San Mateo County 718,451 764,442 0.6% 789,225
Households in Brisbane are, on average, smaller than those in San Mateo County. Households in Brisbane have an average size of 2.34 people, compared to 2.75 people in San Mateo County. 2 person households account for the largest share in both Brisbane and San Mateo County.

Source: U.S. Census Bureau
Households in Brisbane have a lower median income than those in San Mateo County. Households in Brisbane have a median income of $112,016, compared to $122,641 for households in San Mateo County. The chart below indicates the share of households by income brackets. In both Brisbane and San Mateo County, the most common household income is $200k or higher.

ATTACHMENT 3
Neighborhood & Demographic Overview
Bowery Valuation 2600045589 7
Source: U.S. Census Bureau
Housing
Single-family homes, followed by townhomes then 10-19-unit properties account for the most common forms of housing in Brisbane. 64% of the housing units in Brisbane are occupied by their owner. This percentage of owneroccupation is higher than the San Mateo County level of 59%.

Source: U.S. Census Bureau
Source: U.S. Census Bureau
ATTACHMENT 3
Neighborhood & Demographic Overview
Bowery Valuation 2600045589 8
Homes in Brisbane have a median value of $889,200, compared to $1,089,400 for San Mateo County. In Brisbane, the most common home value is between $750k - $1 million, compared to between $1 million - $1.5m for San Mateo County.

Source: U.S. Census Bureau
Homes in Brisbane have a median year built of 1980, compared to 1965 for San Mateo County. In Brisbane, the largest share of homes were built between 1990-1999, compared to between 1950-1959 for San Mateo County.

Source: U.S. Census Bureau
Transportation
In Brisbane, the majority of residents drive alone with 70% choosing to do so. The second most common method is public transit with 10%.

Commuters in Brisbane have a median commute time of about 32 minutes. In Brisbane, the most common commute time is between 45-59 minutes, compared to 30-34 minutes for San Mateo County.

ATTACHMENT 3
Neighborhood & Demographic Overview
Bowery Valuation 2600045589 9
Source: U.S. Census Bureau
Source: U.S. Census Bureau
Transportation Methods
Brisbane benefits from strong regional and local transportation access. Major corridors include Bayshore Boulevard and U.S. Highway 101, while nearby interstates provide efficient connections throughout the San Francisco Peninsula and the broader Bay Area.

Passenger rail service is accessible through Caltrain, offering connections throughout the Peninsula and to San Francisco and San Jose.

Public transportation is available via SamTrans bus service and nearby BART and Caltrain stations, linking the community to major employment centers and transit hubs.

Air travel is served by San Francisco International Airport (SFO) and Oakland International Airport (OAK), providing extensive domestic and international flight options.

Conclusion
Brisbane is a city in San Mateo County, California with access to US highways, public transportation, a range of housing options, recreational amenities, and businesses and retailers for everyday use. Brisbane has experienced moderate population growth over the past decade, a trend that will likely continue in the near term.

ATTACHMENT 3
Zoning Summary
Bowery Valuation 2600045589 10
Zoning Summary
8 Visitacion Avenue is in a (NCRO-2) Neighborhood Commercial zone. Below is a summary of the subject property's compliance with regard to use and bulk regulations.

Zoning Summary
Authority Classification
Property Jurisdiction Brisbane9
Existing Zoning Classification (NCRO-2) Neighborhood Commercial Special Permitting or Condition(s) (i.e., site plan
approval, PUD, or other variance)
None known
Summary of Use and Bulk Regulations
Permits Status
Current Use Accessory dwelling units and junior accessory dwelling units associated with an existing or proposed single family dwelling duplex or multiple family dwelling, financial institutions, home occupations, large family day care homes in a dwelling unit if part of a mixed use development, medical facilities, offices, personal services, restaurants, retail sales and rental, and small family day care homes in a dwelling unit if part of a mixed use development Conforming
Minimum Lot
Size
2500 Complying
Minimum Lot
Width / Frontage
25 Complying
Maximum Height
Of Structures Ft
28, Authorized by a design permit: 35 Complying
Minimum Front
Setback Ft
No requirement (0) Complying
Minimum Side
Setback Ft
No requirement (0), Abutting any residential district: 10 Complying Rear Setback 10 Complying
Density Of
Development
Density of Residential Use: Dwelling unit density in a mixed use shall be established by use permit
Complying
Min. Parking
Required
14 Complying
The (NCRO-2) Neighborhood Commercial zone permits accessory dwelling units and junior accessory dwelling units associated with an existing or proposed single family dwelling duplex or multiple family dwelling, financial institutions, home occupations, large family day care homes in a dwelling unit if part of a mixed use development, medical facilities, offices, personal services, restaurants, retail sales and rental, and small family day care homes in a dwelling unit if part of a mixed use development as of right. 8 Visitacion Avenue is a multifamily property, is conforming with regards to the allowable uses.

The subject is complying with regards to bulk regulations.

Based on the subject’s current zoning regulations, 14 parking spaces are required on the subject property. The subject has 14 available and is complying with regards to parking regulations. 9 The zoning map can be found in the Map Gallery, which is located in the Addenda.

ATTACHMENT 3
Assessed Value & Real Estate Taxes
Bowery Valuation 2600045589 11
Assessed Value & Real Estate Taxes
Current Tax Liability
Real property in California is assessed at a county level. With the passing of Proposition 13 in 1978, property taxes are limited in California to 1% of the assessed value plus local voter-approved bonded indebtedness and special assessments. Proposition 13 also provides for a maximum taxable assessment increase of 2.0% per year unless ownership to the respective property has been transferred or significant new construction occurs. When real property is sold, it becomes uncapped and the taxable assessed value is set at the sale price, and the 2.0% yearly cap becomes applicable for future years. The current real estate tax amount has been capped as described by Proposition 13. A sale of the subject would trigger a reassessment and increased real estate taxes if it sold for a price consistent with the value conclusions presented in this report. The table below outlines the current assessed value for the subject property.

Final Tax Assessment
Actual
Land $0.00
Building + $0.00
Total $0.00
ATTACHMENT 3
Assessed Value & Real Estate Taxes
Bowery Valuation 2600045589 12
Tax Liability
Total PSF
Taxable Assessed Value $0.00 $0.00
Tax Rate (Brisbane - Brisbane Class,
2019)
× 0% 0%
Special Assessment Row $20.82 $0.00
Tax Liability $20.82 $0.00
We note the property is 100% affordable and deed restricted. Ownership is only responsible for special assessments as the property is fully tax exempt.

Projected Tax Liability
In order to determine the projected tax liability, we have applied a tax rate of 0% to our projection of the assessed value.

We note the property is 100% affordable and is tax exempt. The only taxes ownership pays are the special assessments, which are projected at $20.82 annually.

Total PSF
Taxable Assessed Value (Provided) $2,332,684 $116.65
Tax Rate (Brisbane - Brisbane Class, 2019) × 0% 0%
Special Assessment Row $20.82 $0.00
Tax Liability (Projected) $21 $0.00
ATTACHMENT 3
Site Description
Bowery Valuation 2600045589 13
Site Description
Location The subject property is located along Visitacion Avenue in the Brisbane neighborhood of Daly City Brisbane.

Surrounding Uses It is located on a primarily residential and commercial block.

Transportation
Site Area 17,138 square feet
Shape Rectangular
Frontage Visitacion: 90 feet
San Francisco: 210 feet
Inyo: 84 feet
Access The primary access is from Visitacion Avenue
Topography Generally level at street grade
Drainage Assumed adequate
Paving All roads are paved with asphalt and are in satisfactory condition.

Street Lighting Adequate
Hazardous Substances We observed no evidence of toxic or hazardous substances during our inspection of the site. However, environmental issues are beyond our scope of expertise. It is assumed that the property is not adversely affected by environmental hazards.

ATTACHMENT 3
Site Description
Bowery Valuation 2600045589 14
Easements,
Encroachments, and
Restrictions
We did not receive a title report. We know of no deed restrictions, private or public, that further limit the subject property’s use. It is noted that any further research required to determine whether or not such restrictions exist, is beyond the scope of this appraisal assignment. Our valuation assumes no adverse impacts from easements, encroachments or restrictions, and further assumes that the subject has clear and marketable title.

Seismic Hazards
(Earthquake)
All properties in California are subject to some degree of seismic risk. The Alquist-Priolo special Studies Zone Act of 1972 was enacted by the State of California to regulate development near active earthquake faults. The Act required the State Geologist to delineate “special studies zones” along known active faults in California. Cities and Counties affected by the identified zones must limit certain development projects within the zones unless geologic investigation demonstrates that the sites are not threatened by surface displacement from future faulting. According to “Fault-Rupture Hazard Zones in California” published in 2018 by the California Department of Conservation, Department of Mines and Geology, the subject is not within an area affected by the Alquist-Priolo Special Studies Zone Act. Related development limitations do not apply. The subject is not within 1,000 feet of a Alquist Priolo earthquake zone.

Utilities & Services Water/Sewer and Refuse – City
Police & Fire Protection – City
Gas – PG&E
Electricity – PG&E
Flood Hazard Status According to National Flood Insurance Program Rate Map dated April 5, 2019 Community Panel #06081C0042F the subject is located within a Zone X flood zone.

Zone X is an area of minimal flooding. These areas are determined to be outside the 500-year floodplain and are determined to be outside the 1% and 0.2% annual chance floodplains.

Conclusion The site is similar to others in the vicinity, and there are no known negative external factors. Based on its current use, it is functionally adequate.

Ground Lease
The subject property is currently encumbered by a ground lease with The Redevelopment Agency of the City of Brisbane and BRIDGE Housing. The lease is set to expire in 2028. The existing rental agreement states that ground rent payments consists of any surplus cash associated with the operation of the property; however, to the best of our knowledge, no ground rent payments have ever been made.

HEART, the pending buyer of the property, intends to sign a new 55 year ground lease once the property is transferred to them. The lease rate for this ground lease will be $1 per year. At the request of the client, we have provided the hypothetical value of the subject property under the terms of this new ground lease agreement. While there is no official documentation of this lease agreement it is currently in the works and will be finalized before the expiration of the existing lease agreement.

ATTACHMENT 3
Description of Improvements
Bowery Valuation 2600045589 15
Description of Improvements
Building Description
The subject is a 2-story, walk-up, multifamily building consisting of 14 residential units with 19,998 square feet of gross building area. The property is currently operating as an affordable senior housing project property and consists of twelve, 1 BR / 1 BA units and two, 2 BR / 1 BA units. All of the units are deed restricted. Upon transfer of the property, HEART will update the rent restriction levels to include three 30% AMI units, one 50% AMI unit, six 60% AMI units, and four 120% AMI units.

The property is currently encumbered by a ground lease with The Redevelopment Agency of the City of Brisbane.

The existing ground lease expires in 2028. Based on the provided ground lease, the rental payments consist of any surplus cash associated with the operation of the property; however, there have reportedly never been any payments on the ground lease as there has never been surplus cash over the life of the lease. The current owner, BRIDGE, intends to sell the property to HEART of San Mateo County. We note that this is not a traditional sale as HEART will essentially be assuming the remaining debt on the property. HEART is currently finalizing a new ground lease which will be $1 per year that will commence upon the existing ground lease expiration. The project also features a senior community center that is subleased for $1 per year. We note this sublease expires along with the existing ground lease and will be renewed upon expiration for $1 to match the 55 year term of the new ground lease. This community center has been treated as an amenity given the lack of income associated with the space.

Overall, the property is considered to be in average condition.

It was built in 2000.

Building Inspection
On January 20, 2026, Sam Cimino of Bowery Valuation conducted an interior and exterior inspection of the subject property. The inspection included a tour of the building facade, exterior entrance, common areas, and stairs. We were able to inspect the stairs and they are in average condition. We were unable to inspect the roof, but assume it is in average condition. Nevertheless, we recommend a roof inspection by a qualified professional. Moreover, we did not observe any hazardous substances on the improvements or adverse environmental or physical conditions.

Unit Inspection
We inspected 3 one-bedroom units and 1 two-bedroom unit.

Structural, Utilities & Mechanicals
Structural
Foundation Poured concrete
Structural System We assume the structural system is adequate.

Exterior Walls Stucco
Windows Sliding
Roof Flat built-up roof
Utilities
Electricity Individual electric meters are located outside.

Hot Water Central hot water heater system located in the utility room.

ATTACHMENT 3
Description of Improvements
Bowery Valuation 2600045589 16
Gas Individual gas meters are located outside.

Heating/Cooling HVAC system located in the unit for heating and cooling.

Mechanicals
Elevators None
Plumbing We assume the plumbing is adequate and meets local building code requirements.

Sprinklers None
Layout & Finishes
Basement/Cellar The subject does not contain a basement or a cellar.

Entry & Hallways We have not inspected the entryway and interior hallways, but we assume they are in satisfactory condition.

Laundry The subject contains a laundry room as well as in unit washer/dryers.

Stairwell There ae exterior staircases that runs from the ground floor to the 2nd floor.

Security Door locks
Amenities
Building Amenities
Laundry Room There is a laundry room in the building with leased washers and dryers.

Storage Units There are no storage units in the building.

Parking There are 14 parking spaces on the property site.

Shared Recreation Room The building features a shared recreation room.

Unit Amenities
Washer/Dryer All units have washer/dryer hookups.

Residential Unit Finishes
We note that the finishes vary depending on the tenure of the in-place tenants and how recently the unit was renovated.

Kitchens The units generally feature average quality kitchen finishes relative to typical units in similar walk up buildings in the area. The units typically contain linoleum flooring, laminate counter tops, natural wood cabinets, standard oven range stovetops, and standard refrigerators.

Bathrooms The units generally feature average quality bathroom finishes relative to typical units in similar walk up buildings in the area. The units typically contain vinyl tile flooring, bathtub shower combo tubs, laminate top set in cabinet sinks, and ceramic toilets.

Bedrooms The units generally feature average quality bedroom finishes relative to typical units in similar walk up buildings in the area. The units typically contain vinyl plank and carpet flooring, and sheet rock walls.

ATTACHMENT 3
Description of Improvements
Bowery Valuation 2600045589 17
Living Area The units generally feature average quality living room finishes relative to typical units in similar walk up buildings in the area. The units typically contain vinyl plank and carpet flooring, and sheet rock walls.

Residential Unit Distribution Summary
Unit Type No. of Units Avg. SF/Unit Total Leasable SF
1 BR 120% AMI 3 696 2,089
1 BR 30% AMI 3 694 2,083
1 BR 50% AMI 1 695 695
1 BR 60% AMI 5 726 3,632
2 BR 120% AMI 1 833 833
2 BR 60% AMI 1 833 833
Totals/Average 14 726 10,165
Condition, Deferred Maintenance & Remaining Economic Life Condition
Based on our inspection, the subject is in average condition. The subject was constructed in 2000 and adequately maintained over the years.

Deferred Maintenance
No Property Condition Report was given in conjunction with this appraisal.

The subject is in average condition. During our visit to the building, we noticed no significant items of deferred maintenance.

Remaining Economic Life
While the improvements were originally constructed in 2000 and adequately maintained over the years, we estimate the effective age to be 20 years; given a useful life of 50 years, the remaining economic life of the building is estimated as 30 years.

Summary
The subject was constructed in 2000 and adequately maintained over the years. Based on our inspection, the subject is in average condition. The building features a functional design with typical site coverage. No significant functional obsolescence was noted during our inspection. The layout, site coverage of the improvements and positioning of the improvements as well as the construction quality of the improvements, interior layout, building mechanicals, building-wide and unit amenities and finishes are functional by market standards.

ATTACHMENT 3
Description of Improvements
Bowery Valuation 2600045589 18
Floor Plans
Floor Plans Floor Plans
Floor Plans Floor Plans
Floor Plans Floor Plans
ATTACHMENT 3
Description of Improvements
Bowery Valuation 2600045589 19
Floor Plans
ATTACHMENT 3
Submarket Analyses
Bowery Valuation 2600045589 20
Submarket Analyses
Daly City/Brisbane: Multifamily Submarket Analysis
The information contained in this report was provided using 2025 Q3 CoStar data for the Daly City/Brisbane Multifamily Submarket ("Submarket") located in the San Francisco Market ("Market").

Overview
The subject property is in the Daly City/Brisbane Submarket of the San Francisco Market, defined in the map above.

This Submarket accounts for 4.1% of the Markets total inventory with 7.8k units. In the Daly City/Brisbane Submarket, demand remains strong with vacancy rates down yoy and over the past quarter, decreasing -163 bps yoy to 1.6%.

Despite this, rents are up 4.19% over the past year, increasing 1.44% in the latest quarter. Despite positive fundamentals, values decreased -1.5% over the past year after negative growth in the latest quarter, ultimately decreasing to $426,483/unit.

Sector Fundamentals
Daly City/Brisbane YoY QoQ
San
Francisco YoY QoQ
Market Rent/Unit $2,629 4.19% 1.44% $3,302 6.33% 0.92%
Vacancy Rate 1.64% -163 bps -61 bps 4.39% -164 bps -44 bps Net Absorption Units 47 30.6% 571.4% 1,012 20.8% -11.5% Asset Value/Unit $426,483 -1.5% -0.8% $527,529 0.1% 0.3% Market Cap Rate 4.37% 9 bps 1 bps 4.55% 4 bps -1 bps
Transaction Count 2 100% 100% 65 18% -54%
Sales Volume $16,056,000 703% 173% $621,298,112 33% -22% ATTACHMENT 3
Submarket Analyses
Bowery Valuation 2600045589 21
The table below presents historical performance of key indicators for multifamily space in the Submarket including inventory & construction levels, net absorption, vacancy & availability, rental rates, pricing, and cap rates.

Historical Multifamily Performance: Daly City/Brisbane Submarket Period
Inventory
Units
Under
Construction
Units
Net
Delivered
Units 12
Mo
Absorption
Units 12 Mo
Vacancy
Rate
Market
Effective
Rent/Unit
Asset
Value/Unit
Market
Cap
Rate
2025 Q3 7,776 214 0 126 1.6% $2,629 $426,483 4.37%
2025 Q2 7,776 0 0 115 2.2% $2,592 $429,994 4.36%
2024 7,776 0 816 904 3.0% $2,528 $428,928 4.32%
2023 6,960 816 0 115 4.6% $2,404 $485,782 4.18%
2022 6,960 816 0 150 6.2% $2,401 $548,986 3.64%
2021 6,960 0 0 139 8.4% $2,372 $612,465 3.23%
2020 6,960 0 0 -285 10.4% $2,219 $537,002 3.49%
2019 6,960 0 0 55 6.3% $2,418 $550,749 3.51%
2018 6,960 0 0 -11 7.1% $2,393 $523,738 3.57%
2017 6,960 0 0 -47 6.9% $2,317 $483,516 3.67%
2016 6,960 0 0 -55 6.2% $2,278 $460,635 3.71%
2015 6,960 0 0 -35 5.5% $2,295 $437,080 3.73%
Supply & Demand
The Submarket has 7.8k units of multifamily space, and developers have added, net of demolitions, 816 units over the past ten years, increasing inventory by 11.7% during that time.

Although demand has declined, in the absence of inventory growth, vacancy rates have compressed 163 bps over the past year from 3.3% to 1.6%, remaining below the 10-year average of 6.3%, and below the Market average by 275 bps. With 47 units absorbed in 2025 Q3, vacancy rates have compressed 61 bps over the past quarter. In the third quarter, multifamily tenants in the Submarket absorbed 47 units, an increase from the 7 units absorbed in 2025 Q2, and an improvement from the 36 units absorbed in the same quarter last year.

Vacancy Rates
- 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
2025
Q2
2025
Q3
National 6.3% 6.6% 6.8% 6.6% 6.6% 6.8% 5.1% 6.6% 7.8% 8.3% 8.2% 8.2% Market 5.1% 5.1% 5.4% 5.1% 5.8% 10.6% 7.7% 6.8% 6.3% 5.5% 4.8% 4.4% Submarket 5.5% 6.2% 6.9% 7.1% 6.3% 10.4% 8.4% 6.2% 4.6% 3.0% 2.2% 1.6% Class A 12.6% 10.2% 7.9% 6.2% 3.5% 7.8% 4.5% 4.1% 5.3% 6.0% 4.3% 2.2% Class B 6.8% 8.1% 9.2% 9.2% 7.7% 13.1% 11.0% 8.1% 5.2% 2.4% 1.7% 1.0% Class C 3.6% 4.1% 4.4% 4.8% 4.9% 7.7% 5.9% 4.4% 3.9% 3.6% 3.1% 2.6% ATTACHMENT 3
Submarket Analyses
Bowery Valuation 2600045589 22
Source: CoStar
Rents
At $2,629/unit, rents in the Daly City/Brisbane Submarket are roughly 20% lower than the Market average of $3,302/unit. Rents vary throughout the Submarket. Class A apartment units are a premium with an average effective rent rate of $3,237/unit, followed by $2,718/unit for Class B and $2,405/unit for Class C units. Rents in the Submarket have increased 1.45% per annum over the past decade, falling short of the Market average, where rents increased

1.49% per annum during that time.

Market Rents
- 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
2025
Q2
2025
Q3
National $1,309 $1,341 $1,374 $1,419 $1,468 $1,482 $1,630 $1,695 $1,711 $1,729 $1,758 $1,746 Market $2,873 $2,871 $2,921 $3,026 $3,071 $2,791 $2,998 $3,046 $3,022 $3,127 $3,272 $3,302 Submarket $2,295 $2,278 $2,317 $2,393 $2,418 $2,219 $2,372 $2,401 $2,404 $2,528 $2,592 $2,629 Class A $3,192 $3,211 $3,230 $3,228 $3,214 $3,128 $3,163 $3,191 $3,200 $3,204 $3,212 $3,237 Class B $2,377 $2,315 $2,338 $2,417 $2,432 $2,179 $2,395 $2,433 $2,415 $2,588 $2,673 $2,718 Class C $2,062 $2,132 $2,203 $2,279 $2,327 $2,229 $2,263 $2,275 $2,318 $2,355 $2,380 $2,405 Prior to the pandemic, the Daly City/Brisbane Multifamily Submarket experienced softening rent growth. In 2019 Q4, annual rent growth in the Submarket softened below the previous quarter, and was below the historical average, with annual growth of 1.05%. In 2020 Q2, quarterly rent growth fell to -1.0%. By the end of 2020, rents had fallen

8.21% from the 2019 Q4 rent level of $2,418/unit. From 2019 Q4 to 2021 Q4, rents decreased 1.90%. Quarterly rent growth in 2025 Q3 increased 1.44%, pushing annual growth to 4.19%.

ATTACHMENT 3
Submarket Analyses
Bowery Valuation 2600045589 23
Source: CoStar
Construction & Future Supply
Data from CoStar indicates that developers have been inactive for much of the past ten years. In fact, they have added just 816 units to the Submarket during that time period. Developers remain active in the Submarket despite elevated construction and debt costs. In fact, developers are currently active with 214 units, or the equivalent of 2.8% of existing inventory, underway. Demand in the Daly City/Brisbane Submarket has outpaced new deliveries over the past year but could slow along with softening economic growth.

ATTACHMENT 3
Submarket Analyses
Bowery Valuation 2600045589 24
Source: CoStar
Capital Markets
Investors have not been very active in the Submarket over the past three years, and few transactions have occurred.

During that time, investors have closed on average 3 transactions per year with an annual average sales volume of $357.7 million. Over the past year, there were 5 closed transactions across 460 units, for a total sales volume of $118.9 million. As of 2025 Q3, CoStar data indicates there were 2 transactions for a total sales volume of $16.1 million, compared to $5.9 million in the previous quarter.

ATTACHMENT 3
Submarket Analyses
Bowery Valuation 2600045589 25
Source: CoStar
Market pricing, based on the estimated price movement of all properties in the Submarket, is currently $426,483/unit. Values have compressed 1.5% over the past year and continued to fall in the past quarter, decreasing

0.8% in 2025 Q3. Capitalization rates increased 9 bps over the past year to 4.4% and increased 1 bps in 2025 Q3.

ATTACHMENT 3
Submarket Analyses
Bowery Valuation 2600045589 26
Source: CoStar
Outlook
Multifamily market conditions in the Daly City/Brisbane Submarket indicate positive annual absorption, although it has slowed. Vacancy rates have been aided by an absence of inventory growth as well. With vacancy rates compressing, quarterly rent growth increased 1.44%, increasing annual growth 4.19%. Looking ahead to the near term, it is likely that tenant demand remains active, although an active pipeline will likely add upward pressure on vacancy rates, slowing rent growth.

Max Allowable Rents
We note HEART intends to apply for a new regulatory agreement with new max rents. The existing rents are well below the proposed max rents and HEART is anticipating they will be able to bring one unit to the new max rents per year. We note that at the request of the client, we have assumed that all units are rents at the newly proposed max allowable rents. The proposed max allowable rents are illustrated below:

ATTACHMENT 3
Submarket Analyses
Bowery Valuation 2600045589 27
ATTACHMENT 3
Highest & Best Use
Bowery Valuation 2600045589 28
Highest & Best Use
In determining highest and best use, we have considered the current trends of supply and demand on the market, current zoning regulations and other possible restrictions, and neighboring land uses.

It is to be recognized that in cases where a site has existing improvements on it, the highest and best use may be determined to be different from the existing use. The existing use will continue, however, unless and until land value in its highest and best use exceeds the total value of the property in its existing use.

In estimating highest and best use, alternative uses that meet the four criteria of legally permissible, physically possible, financially feasible, and the maximally productive use, are considered and tested for the subject site as if vacant and as improved.

As Vacant
Legally Permissible The subject is in zone (NCRO-2) Neighborhood Commercial, which permits Accessory dwelling units and junior accessory dwelling units associated with an existing or proposed single family dwelling duplex or multiple family dwelling, Financial institutions, Home occupations, Large family day care homes in a dwelling unit if part of a mixed use development, Medical facilities, Offices, Personal services, Restaurants, Retail sales and rental, and Small family day care homes in a dwelling unit if part of a mixed use development use as of right. There are no zoning changes anticipated and no easements or encroachments that preclude development. We note the property is deed restricted and any development is restricted to be 100% affordable.

Physically Possible The site contains 17,138 square feet with 90 feet of frontage along Visitacion, 210 feet of frontage along San Francisco and 84 feet of frontage along Inyo. The size falls within the range of improved sites in the area. All necessary utilities are available and the site appears functional for a variety of permitted uses.

Financially Feasible The subject property is located within a primarily residential neighborhood. Based on our analysis of the market, there is sufficient demand for multifamily properties. Market conditions are such that new multifamily construction is feasible, as the value would sufficiently exceed the cost plus developer's profit. New construction in the neighborhood is currently underway and newly developed multifamily buildings in the subject's submarket are selling, an indication of feasibility.

Maximally Productive/
Highest and Best Use
There does not appear to be any reasonably probable use of the site that would generate a higher residual land value than to develop for multifamily use. Based on the normal market density level permitted by zoning, this is considered the maximally productive use of the site.

Conclusion Based on the subject property's zoning, physical characteristics, location, and forecasted economic conditions, it is our opinion that the highest and best use of the site as vacant is to develop a Deed Restricted Affordable Housing building to the highest density permitted by zoning and supported within the market.

ATTACHMENT 3
Highest & Best Use
Bowery Valuation 2600045589 29
As Improved
Legally Permissible The subject improvements consist of 19,998 square feet of gross building area on a 17,138 square feet site which reflect an FAR of 1.17. Located in the (NCRO-2) Neighborhood Commercial zone, permitted uses include various residential uses. The current multifamily use of the improvements is a permitted use. The improvements also comply to the bulk requirements as specified and discussed in the zoning section of the report.

Physically Possible The subject is a 2-story, walk-up, multifamily building consisting of 14 residential units with 19,998 square feet of gross building area. The property is currently operating as an affordable senior housing project property and consists of twelve, 1 BR / 1 BA units and two, 2 BR / 1 BA units. All of the units are deed restricted. Upon transfer of the property, HEART will update the rent restriction levels to include three 30% AMI units, one 50% AMI unit, six 60% AMI units, and four 120% AMI units. The layout, site coverage and positioning of the improvements are considered functional for the current use. While it would be physically possible for a wide variety of uses, based on legal restrictions in place and the design of the improvements, continued use of the property as multifamily use is considered the most functional. Additionally, there is no excess or surplus land noted nor excess FAR to consider.

Financially Feasible The subject property is located within a primarily residential neighborhood exhibiting low vacancy rates and increasing rental rates. As improved, the subject reflects 100% occupancy and will generate a positive net cash flow. Therefore, use as a multifamily property is financially feasible. Also, demolition is not an option.

Maximally Productive/
Highest and Best Use
There does not appear to be any alternative use that could reasonably be expected to provide a higher present value than the current use, and the existing use exceeds the value of the site as vacant. Continued multifamily use is concluded to be maximally productive.

Conclusion Based on the subject property's zoning, physical characteristics, location, and forecasted economic conditions, continued Deed Restricted Affordable Housing use is concluded to be the highest and best use as improved.

Most Probable Buyer Taking into account the size and characteristics of the property and its multifamily occupancy, the likely buyer is a local investor/developer.

ATTACHMENT 3
Appraisal Valuation Process
Bowery Valuation 2600045589 30
Appraisal Valuation Process
The Cost Approach is based on market participants relating value of improvements to associated costs to build. In the Cost Approach, the cost to build a new or substitute property is used as a comparison to the subject. The replacement cost or reproduction cost estimate is then adjusted for all applicable depreciation. This approach reflects a good indicator of value when the improvements are new, nearly new, close to fully depreciated, or when the property has unique or specialized improvements.

The Income Capitalization Approach reflects the analysis of a property’s capacity to generate future income and capitalizes the income into an indication of present value. This approach reflects the relationship between a property’s potential income and its market value and is a strong indicator of value when there is reliable market data to derive market rents, vacancy rates, stabilized expenses, and capitalization/discount rates. The two most common valuation techniques are direct capitalization and the discounted cash flow (DCF) analysis, with one or both methods applied as appropriate. This approach is widely used in appraising income producing properties.

The Sales Comparison Approach assumes that an informed purchaser would pay no more for a property than the cost of acquiring another existing property with similar utility. This approach is reliable in an active market with sufficient sales data where few differences exist between the comparable sales and the subject, and the sales data collected is credible and accurate. Similar property types in competitive locations tend to sell within a consistent range, and this factor makes valuation on a per square foot and per unit basis a strong predictor of value. The Sales Comparison Approach is often relied upon for owner-user properties and/or in markets where leasing activity is sparse. For leased properties, this approach is more often considered as secondary support for the Income Approach.

Each approach applied is then reconciled to a final value conclusion after weighing the quantity and quality of data analyzed and the applicability of each approach to the subject property type.

Approaches to Value Applied
Approach Applicability to Subject Use in Assignment
Cost Approach Not Applicable No
Income Capitalization Approach Applicable Yes
Sales Comparison Approach Applicable Yes
The difficulty in credibly isolating the influence of physical and economic depreciation on value affects the reliability of the Cost Approach. Investors typically give nominal weight to this analysis if the asset is operating on a stabilized basis and its cost bears little relationship to the value, therefore it was not found to be appropriate in our value development.

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 31
Income Capitalization Approach
In the Income Capitalization Approach, a property's capacity to generate future benefits is analyzed; the forecasted income is capitalized into an indication of present value. Definitions of commonly used measures of anticipated benefits are defined in the Glossary of Terms within the Addenda.

The Income Capitalization Approach supports two methodologies: direct and yield capitalization. Investors in the local market typically utilize a direct capitalization when making investment decisions for this asset class, therefore we conclude that the direct capitalization method is appropriate to apply to the subject.

Income Analysis
Current Residential Rent Roll
8 Visitacion Avenue currently contains 14 occupied unit 8 Visitacion Avenue
# Unit # Unit Type
Bedroo
ms Bathrooms SF Rent Type
Lease
Status
Lease Start
Date
Monthly
Rent Rent/SF
1 I1 60% AMI 2 1 833 Affordable Occupied 04/29/2016 $509.00 $7.33 2 I2 120% AMI 2 1 833 Affordable Occupied 01/19/2023 $1,535.00 $22.11 3 I3 30% AMI 1 1 694 Affordable Occupied 03/02/2020 $807.00 $13.95 4 I4 30% AMI 1 1 694 Affordable Occupied 10/01/2019 $1,058.00 $18.29 5 I5 60% AMI 1 1 718 Affordable Occupied 06/27/2023 $621.00 $10.38 6 I6 120% AMI 1 1 699 Affordable Occupied 01/01/2018 $1,058.00 $18.16 7 V1 60% AMI 1 1 761 Affordable Occupied 03/15/2017 $1,235.00 $19.47 8 V10 30% AMI 1 1 695 Affordable Occupied 02/01/2003 $556.00 $9.60 9 V2 50% AMI 1 1 695 Affordable Occupied 03/01/2019 $1,058.00 $18.27 10 V4 60% AMI 1 1 695 Affordable Occupied 08/28/2020 $1,058.00 $18.27 11 V5 120% AMI 1 1 695 Affordable Occupied 10/22/2020 $1,235.00 $21.32 12 V6 60% AMI 1 1 695 Affordable Occupied 08/01/2025 $1,016.00 $17.54 13 V8 120% AMI 1 1 695 Affordable Occupied 02/16/2000 $807.00 $13.93 14 V9 60% AMI 1 1 763 Affordable Occupied 07/15/2021 $1,150.00 $18.09 Totals/Avg
s
16 14 10,165 $13,703.00 $16.18
Annual $164,436.00
We note this represents the existing rental rates at the property, which are well below that of the newly proposed max allowable rents. At the request of the client, we have provided a hypothetical value as if all the units are leased at the max allowable rents.

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 32
Comparable Rentals
In order to gauge the reasonableness of the contract rents, we have examined the following rental activity in the submarket:
1 BR 120% AMI Rentals
1 BR 120% AMI Rentals Summary
Comp Address Bedrooms Monthly Rent
1 2 West Cavour Street, Daly City, CA 1 $2,300
2 607 Sylvan Street, Daly City, CA 1 $2,350
3 667 Villa Street, Daly City, CA 1 $2,400
4 340 Railroad Avenue, South San Francisco, CA 1 $1,900 5 681 Linden Street, Daly City, CA 1 $2,300
Min $1,900
Avg $2,250
Max $2,400
ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 33
Rent Reconciliation
The subject has no market rate one-bedroom units, as they are all currently affordable. Currently, the in-place rental range is from $807 to $1,235 per month . Comparable one-bedroom units range from $1,900 to $2,400 per monthwith an average of $2,250 per month. Based on the range of the comparables, we forecast a market rent of $2,000 per month. We note the max allowable rents for 120% AMI units is $4,088, which is significantly higher than the market rent for the area. Therefore, we have utilized market rent within our analysis. We conclude towards the bottom end of the range given tenants would need to be incentivized to sign a lease at the property given it is affordable.

The remaining 1 BR units max rents are all below market and we have utilized the provided max allowable rents for these units.

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 34
2 BR 120% AMI Rentals
2 BR 120% AMI Rentals Summary
Comp Address Bedrooms Monthly Rent
1 766 Hillside Boulevard, Daly City, CA 2 $2,895
2 361 Half Moon Lane, Daly City, CA 2 $2,850
3 414 Commercial Avenue, South San Francisco, CA 2 $2,880 4 83 Bellevue Avenue, Daly City, CA 2 $3,200
5 200 Monterey Street, Brisbane, CA 2 $2,900
Min $2,850
Avg $2,945
Max $3,200
ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 35
Rent Reconciliation
The subject has no market rate two-bedroom units, as they are all currently affordable. Currently, the in-place rental range is from $1,535 to $1,535 per month. Comparable two-bedroom units range from $2,850 to $3,200 per month with an average of $2,945 per month. Based on the range of the comparables, we forecast a market rent of $2,900 per month. We note the max allowable rents for 120% AMI units is $4,898, which is significantly higher than the market rent for the area. Therefore, we have utilized market rent within our analysis. We conclude towards the bottom end of the range given tenants would need to be incentivized to sign a lease at the property given it is affordable.

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 36
The remaining 2 BR units max rents are all below market and we have utilized the provided max allowable rents for these units.

Market Rent Comparison
Bedroom
Market
Survey Market Rent Conclusion
1 BR 120% AMI Minimum $1,900.00
1 BR 120% AMI Average $2,250.00 $2,000.00
1 BR 120% AMI Maximum $2,400.00
1 BR 30% AMI Minimum $1,900.00
1 BR 30% AMI Average $2,250.00 $1,010.00
1 BR 30% AMI Maximum $2,400.00
1 BR 50% AMI Minimum $1,900.00
1 BR 50% AMI Average $2,250.00 $1,756.00
1 BR 50% AMI Maximum $2,400.00
1 BR 60% AMI Minimum $1,900.00
1 BR 60% AMI Average $2,250.00 $2,130.00
1 BR 60% AMI Maximum $2,400.00
2 BR 120% AMI Minimum $2,850.00
2 BR 120% AMI Average $2,945.00 $2,900.00
2 BR 120% AMI Maximum $3,200.00
2 BR 60% AMI Minimum $2,850.00
2 BR 60% AMI Average $2,945.00 $2,379.00
2 BR 60% AMI Maximum $3,200.00
Base Residential Income
8 Visitacion Avenue contains 14 residential units; the residential rent roll is summarized by unit type and rent regulation status.

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 37
Rent Roll Summary by Unit Type
Unit Type No. of Units Rental Range Per Month Total Annual Rent Avg. Rent Per Month 1 BR 120% AMI 3 $2,000 - $2,000 $72,000 $2,000
1 BR 30% AMI 3 $1,010 - $1,010 $36,360 $1,010
1 BR 50% AMI 1 $1,756 - $1,756 $21,072 $1,756
1 BR 60% AMI 5 $2,130 - $2,130 $127,800 $2,130
2 BR 120% AMI 1 $2,900 - $2,900 $34,800 $2,900
2 BR 60% AMI 1 $2,379 - $2,379 $28,548 $2,379
Totals/Average 14 $320,580 $1,908
Rent Roll Summary by Rent Regulation Status
Income Type No. of Units Rental Range Per Month Total Annual Rent Avg. Rent Per Month Affordable 14 $1,010 - $2,900 $320,580 $1,908
Totals/Average 14 $320,580 $1,908
The average in place monthly rent is $1,908.

The contract rents are based on the following expense structure:

Landlord's Obligations Common area electricity, refuse removal, water/sewer and common area maintenance.

Tenant Obligations In-unit electricity, cooking gas and heat.

Potential Gross Residential Income
Potential gross residential income is summarized by income type:

Potential Gross Residential Income
Income Type PGI
Affordable $320,580
Total $320,580
Miscellaneous Income
Laundry Income
The subject property derives additional income from washers and dryers in the laundry room. The laundry room is currently leased to and operated by Wash with an annual income of $33. This income equates to $2 per unit per annum. Based on comparable assets in the marketplace, this income is reasonable and will be applied in the stabilized pro forma. We note this estimate is very low; however, the income has been consistent over the past 3 years and the pending buyer is projecting the same income. We have placed primary reliance on the buyer projections.

Parking Income
The subject property has 14 parking spaces available. Parking is a free amenity.

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 38
Other Income
We note that the community center is providing $3,602 of additional annual income for the subject. The existing lease, which expires in 2028 along with the ground lease includes a utility reimbursement of 20% of the costs of gas & electric and 10% of the costs of water and sewer. HEART has stated the lease terms will remain the same for the new lease for the community center space and has projected this income at $3,602. This forecast has been applied to our analysis.

Residential Vacancy and Collection Loss
The subject is 100% occupied and contains 14 affordable residential units. CoStar reports the submarket rate near

1.64% and metro area rate near 4.39%. We note the submarket vacancy rate has dropped 61 basis points QoQ and 163 basis points YoY. Overall, we have concluded to a vacancy below the middle of the range given the affordable housing aspect of the subject. Based on 8 Visitacion Avenue's current and historical operating results, macro market conditions, and investor expectations, a 2.00% residential vacancy and collection loss has been applied.

Effective Gross Income Summary
Effective Gross Income
Potential Residential Income $320,580
Potential Laundry Income $33
Commercial Unit Utilites $3,602
Potential Gross Income $324,215
Less Residential V/C Loss @ 2.00% -$6,412
Less Laundry V/C Loss @ 2.00% -$1
Less Commercial Unit Utilites V/C Loss @ 2.00% -$72
Effective Gross Income $317,731
Operating Expense Analysis
We were provided with the following summarized operating expense information for the subject property. In developing our forecast of operating expenses, we considered the provided expense information as well as expense reports of comparable properties. The data, analyzed in terms of residential units and gross building area, is presented below.

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 39
Owner's Operating Expense History & Projection
Historical & Projected Expenses
2023 Actual 2024 Actual
Gross Per SF Per Unit Gross Per SF Per Unit
Effective Gross Revenue $173,947 $8.70 $12,425 $189,312 $9.47 $13,522 Operating Expenses
Real Estate Taxes $32 $0.00 $2 $37 $0.00 $3
Insurance $15,802 $0.79 $1,129 $12,689 $0.63 $906
Utilities $22,757 $1.14 $1,626 $23,549 $1.18 $1,682
Repairs & Maintenance $40,591 $2.03 $2,899 $54,187 $2.71 $3,871 Payroll & Benefits - - - - - -
General & Administrative $59,691 $2.98 $4,264 $69,558 $3.48 $4,968 Management Fees $13,692 $0.68 $978 $14,103 $0.71 $1,007 Replacement Reserves - - - - - -
Miscellaneous - - - - - -
Total Operating Expenses $152,565 $7.63 $10,898 $174,123 $8.71 $12,437 Total Operating Expenses (Excl. RE Taxes) $152,533 $7.63 $10,895 $174,086 $8.71 $12,435 2025 Actual Owner's Pro Forma
Gross Per SF Per Unit Gross Per SF Per Unit
Effective Gross Revenue $182,685 $9.14 $13,049 $198,524 $9.93 $14,180 Operating Expenses
Real Estate Taxes - - - - - -
Insurance $14,040 $0.70 $1,003 $13,285 $0.66 $949
Utilities $24,012 $1.20 $1,715 $24,852 $1.24 $1,775
Repairs & Maintenance $35,626 $1.78 $2,545 $28,633 $1.43 $2,045 Payroll & Benefits - - - - - -
General & Administrative $116,603 $5.83 $8,329 $82,626 $4.13 $5,902 Management Fees $14,592 $0.73 $1,042 $14,868 $0.74 $1,062 Replacement Reserves - - - - - -
Miscellaneous - - - - - -
Total Operating Expenses $204,873 $10.24 $14,634 $164,264 $8.21 $11,733 Total Operating Expenses (Excl. RE Taxes) $204,873 $10.24 $14,634 $164,264 $8.21 $11,733 ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 40
Comparable Operating Expenses
Basis & Totals
Comp 1 Comp 2 Comp 3 Comp 4 Average
City San Francisco San Francisco South San
Francisco
South San
Francisco
-
State CA CA CA CA -
Expense Period Annualized
Historical
Actual Actual Actual -
Expense Year 2024 2024 2024 2024 -
SF 11,414 8,025 6,016 13,644 9,775
Units 13 8 6 11 10
Insurance $9,388 $12,425 $5,165 $12,236 $9,804
Utilities $22,234 $15,211 $9,950 $30,859 $19,563
Repairs & Maintenance $22,986 $15,740 $5,100 $24,189 $17,004 General & Administrative $1,300 $10,007 $3,400 $5,099 $4,951 Management Fees $8,441 $18,199 $3,000 $20,378 $12,504
Replacement Reserves - - - - -
Total Operating Expenses $64,350 $71,582 $26,615 $92,761 $63,827 Per Unit
Comp 1 Comp 2 Comp 3 Comp 4 Average
Insurance $722 $1,553 $861 $1,112 $1,062
Utilities $1,710 $1,901 $1,658 $2,805 $2,019
Repairs & Maintenance $1,768 $1,968 $850 $2,199 $1,696
General & Administrative $100 $1,251 $567 $464 $595
Management Fees $649 $2,275 $500 $1,853 $1,319
Replacement Reserves - - - - -
Total Operating Expenses $4,950 $8,948 $4,436 $8,433 $6,692 ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 41
Estimated Operating Expenses
Our stabilized annual expense forecast is presented:

Real Estate Taxes
As presented earlier, we forecasted the tax payment at $21 annually or $0.00 per square foot.

Insurance
Per Unit Summary Value Low Average High
2023 Actual $1,129
2024 Actual $906
2025 Actual $1,003
Owner's Projection $949
Comparable $722 $1,062 $1,553
Appraiser’s Forecast $950
Insurance costs vary by the type of coverage. Costs are generally lower (on a per unit basis) for larger buildings and for multi-building policies. Based on the information above, we have projected this expense at $950 per unit, or $13,300 annually.

Utilities
Per Unit Summary Value Low Average High
2023 Actual $1,626
2024 Actual $1,682
2025 Actual $1,715
Owner's Projection $1,775
Comparable $1,658 $2,019 $2,805
Appraiser’s Forecast $1,775
Based on the information above, we have projected this expense at $1,775 per unit, or $24,850 annually.

Repairs & Maintenance
Per Unit Summary Value Low Average High
2023 Actual $2,899
2024 Actual $3,871
2025 Actual $2,545
Owner's Projection $2,045
Comparable $850 $1,696 $2,199
Appraiser’s Forecast $1,500
This expense varies depending on building age, management philosophy, services provided, and accounting methodology. Some management companies expense items that are normally included as capital costs. In addition, repair and maintenance costs may change from year to year; in some cases, repairs that require attention may be postponed due to cash flow considerations. Based on the information above, we have projected this expense at $1,500 per unit, or $21,000 annually. We note the projections include a higher than typical landscaping expense and we have concluded more in line with the expense comparabls.

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 42
General & Administrative
Per Unit Summary Value Low Average High
2023 Actual $4,264
2024 Actual $4,968
2025 Actual $8,329
Owner's Projection $659
Comparable $100 $595 $1,251
Appraiser’s Forecast $650
This expense allows for any expenditure not included in the above categories including general administrative costs, accounting/legal, permits and dues, miscellaneous charges, office expense, etc. Based on the information above, we have projected this expense at $650 per unit, or $9,100 annually.

Management Fees
Per Unit Summary Value Low Average High
2023 Actual $978
2024 Actual $1,007
2025 Actual $1,042
Owner's Projection $1,062
Comparable $500 $1,319 $2,275
Appraiser’s Forecast $1,135
Typically, management fees for similar properties range from 2% to 6% of effective gross income. We have projected this expense at 5% of effective gross income, which equates to $1,135 per unit, or $15,887 annually.

Replacement Reserves
Per Unit Summary Value Low Average High
Comparable - - -
Appraiser’s Forecast $250
This expense provides for the periodic replacement of building components that wear out more rapidly than the building itself and that must be replaced periodically during the building's economic life. We note the owner did not indicate this expense. We have projected this expense at $250 per unit, or $3,500 annually.

Ground Lease
Annual Summary Value Low Average High
Comparable - - -
Appraiser’s Forecast $1
The property is encumbered by a ground lease with the City of Brisbane. The existing ground lease runs through 2028; however, HEART will have a new ground lease in place at the expiration for $1 per year. At the request of the client we have utilized the new ground lease within this analysis. It is worth noting the existing ground lease payment is based upon surplus cash. According to our knowledge, there has never been a payment on the ground lease as there has never been surplus cash at the property. We have projected this expense at $1 annually.

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 43
Total Operating Expenses
Per Unit
Per Unit Summary Value Low Average High
2023 Actual $10,895
2024 Actual $12,435
2025 Actual $14,634
Owner's Projection $6,490
Comparable $4,436 $6,692 $8,948
Appraiser’s Forecast $6,260
Operating expenses, exclusive of real estate taxes, were forecasted at $6,260 per unit. Excluding real estate taxes, the comparables ranged from $4,436 to $8,948 per unit. Our forecast is above the comparables given the higher General & Administrative expense due to the fact the property is an affordable project. Generally speaking, affordable projects have significant G&A expenses due to the large amount of work necessary to audit tenants to ensure they are within the max allowable rents and complying to the regulatory agreement in place.

Stabilized Income & Expenses
Pro Forma
Pro Forma $ PSF Per Unit
Income
Potential Residential Income $320,580 $16.03 $22,899
Laundry Income $33 $0.00 $2
Commercial Unit Utilites $3,602 $0.18 $257
Potential Gross Income $324,215 $16.21 $23,158
Less Residential V/C Loss @ 2.00% -$6,412 -$0.32 -$458
Less Laundry V/C Loss @ 2.00% -$1 -$0.00 -$0
Less Commercial Unit Utilites V/C Loss @

2.00%
-$72 $0.00 -$5
Effective Gross Income $317,731 $15.89 $22,695
Operating Expenses
Real Estate Taxes $21 $0.00 $1
Insurance $13,300 $0.67 $950
Utilities $24,850 $1.24 $1,775
Repairs & Maintenance $21,000 $1.05 $1,500
General & Administrative $9,100 $0.46 $650
Management Fees $15,887 $0.79 $1,135
Replacement Reserves $3,500 $0.18 $250
Ground Lease $1 $0.00 $0
Total Operating Expenses $87,659 $4.38 $6,261
Total Expenses Excluding RE Taxes $87,638 $4.38 $6,260
Net Operating Income $230,072 $11.50 $16,434
Operating Expense Ratio 28%
ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 44
Income Capitalization
In developing an opinion of the overall capitalization rate required by an investor, we will apply several methods of analyses: (1) Comparable Capitalization Rates; (2) National Survey Responses; and (3) Personal Surveys.

Comparable Capitalization Rates
Comparable Cap Rates Table
# Address
Property
Type No. of Units
Year
Built Sale Date
Capitalization
Rate
1 578-586 Guerrero Street, San Francisco, CA Multifamily 6 1913 10/21/25 7.03% 2 132 Southwood Drive, San Francisco, CA Multifamily 7 1958 9/5/25 7.36% 3 1116 Douglas Ave., Burlingame, CA Multifamily 10 1936 7/28/25 3.82% 4 1102 Mason St., San Francisco, CA Multifamily 5 1909 6/12/25 5.30% 5 116 San Luis Avenue, San Bruno, CA Multifamily 7 1964 2/14/25 6.35% 6 198 West Moltke Street, Daly City, CA Multifamily 6 1931 9/12/24 4.70% Avg 5.76%
We analyzed sales of comparable assets within the subject’s periphery and they exhibit overall capitalization rates from 3.82% to 7.36% with an average of 5.76%. We note we could not locate any comparable affordable multifamily properties and have instead utilized traditional market rate properties. Given we have assumed the subject is leased at the maximum allowable rents and there is limited upside associated with the rental rates, we have concluded towards the upper end of the range indicated by the comparables.

National Survey Responses
The PwC Real Estate and Real Estate Research Corporation's investment surveys summarize the expectations of institutional investors. As indicated, the going-in capitalization rates range from 4% to 6.5%, with an average between 5.1% and 5.23%.

Summary
Survey Low Avg High
Personal Survey 6.00% - 6.50%
PWC 4Q 2025 4.00% 5.23% 6.50%
RERC - Situs 3Q 2025 4.30% 5.10% 5.50%
Comparable Cap Rates 3.82% 4.99% 6.35%

We note the survey responses are indicative of typical market properties and we would expect the subject to achieve an OAR at the upper end of the range.

Capitalization Rate Conclusion
An overall rate of 7.00% is applied in the analysis and in line with investor expectations. The value is calculated below:

ATTACHMENT 3
Income Approach
Bowery Valuation 2600045589 45
Value Opinion Via the Income Capitalization Approach
Date of Value Value Final Value
(RD)
NOI $230,072 -
Cap Rate 7.00% -
As Is Market Value Via the Income Capitalization Approach January 20, 2026 $3,286,743 $3,290,000 In consideration of the above analysis, the As Is Market Value of $3,290,000 reflects a unit value of $235,000 per unit. The final value is rounded to the nearest $10,000.

ATTACHMENT 3
Sales Comparison Approach
Bowery Valuation 2600045589 46
Sales Comparison Approach
In the Sales Comparison Approach, an opinion of market value is provided by comparing the subject property to transactions of competitive assets. A major premise is the principle of substitution which holds market value is directly related to the prices of comparable properties as a knowledgeable investor will pay no more for a substitute property.

In order to analyze comparable sales, it is necessary to convert the sale prices to an appropriate unit of comparison, a process which facilitates price comparisons between properties of different sizes, and it also enables adjustment for qualitative differences. Since investors typically purchase similar buildings in the subject's area in terms of value per residential unit, we have applied this unit of comparison.

Comparable Sales Summary10
Address Sale Date
Residential
Unit Sale Price
Sale Price
Per
Residential
Unit
NOI Per
Residential
Unit
Cap
Rate
1 578-586 Guerrero Street, San Francisco, CA 10/21/2025 6 $1,390,000 $231,667 $16,286 7.03% 2 132 Southwood Drive, San Francisco, CA 09/05/2025 7 $2,000,000 $285,714 $21,029 7.36% 3 1116 Douglas Ave., Burlingame, CA 07/28/2025 10 $2,900,000 $290,000 $11,078 3.82% 4 1102 Mason St., San Francisco, CA 06/12/2025 5 $1,144,000 $228,800 $12,126 5.30% 5 116 San Luis Avenue, San Bruno, CA 02/14/2025 7 $1,450,000 $207,143 $13,154 6.35% 6 198 West Moltke Street, Daly City, CA 09/12/2024 6 $2,000,000 $333,333 $15,667 4.70% 10 The outlines of each of the comparable sales can be found in the Addenda.

ATTACHMENT 3
Sales Comparison Approach
Bowery Valuation 2600045589 47
We note that despite an extensive search, we were unable to find any comparable affordable projects similar to the subject. We have utilized typical market rate properties and made an adjustment to account for the fact the property is affordable. Further, we were unable to find any leasehold sales similar to the subject. Given the fact the proposed ground lease is only $1 per year, there is no meaningful impact on the value of the subject as a result of the ground lease.

ATTACHMENT 3
Sales Comparison Approach
Bowery Valuation 2600045589 48
Comparable Sales Adjustment Grid
Comparable # Subject 1 2 3 4 5 6
Address 8 Visitacion
Avenue, Brisbane,
CA
578-586 Guerrero
Street
132 Southwood
Drive
1116 Douglas
Ave.
1102 Mason St. 116 San Luis
Avenue
198 West Moltke
Street
Sale Date 10/21/2025 9/5/2025 7/28/2025 6/12/2025 2/14/2025 9/12/2024 Sale Price $1,390,000 $2,000,000 $2,900,000 $1,144,000 $1,450,000 $2,000,000 Cap Rate 7.03% 7.36% 3.82% 5.3% 6.35% 4.7%
Property Rights Leasehold Interest Leased Fee Interest Leased Fee Interest
Leased Fee
Interest
Leased Fee
Interest
Leased Fee
Interest
Leased Fee
Interest
City Brisbane San Francisco San Francisco Burlingame San Francisco San Bruno Daly City # of Residential Units 14 6 7 10 5 7 6
Average Unit Size 726 606 777 525 1,069 914 750
GBA 19,998 3,635 5,440 5,253 5,344 6,660 5,979
Condition Average Average Average Average Average Average Average Year Built 2000 1913 1958 1936 1909 1964 1931
Parking Ratio 1.00 per unit 1.00 per unit
Price Per Residential Unit: $231,667 $285,714 $290,000 $228,800 $207,143 $333,333 Property Rights 0% 0% 0% 0% 0% 0%
Financing Terms None 0% 0% 0% 0% 0% 0%
Conditions of Sale None 0% 0% 0% 0% 0% 0%
Market Conditions (Time): January 20, 2026 0% 0% 0% 0% 0% 0% Cumulative Price Per
Residential Unit:
$231,667 $285,714 $290,000 $228,800 $207,143 $333,333
Location Central Brisbane 0% 0% -5% 0% 15% 0%
Utility 0% 0% 0% 0% 0% 0%
Size 0% 0% 0% 0% 0% 0%
Rent Stabilization Level 0% 0% 0% 0% 0% 0%
Condition -5% 0% -5% 5% 0% -5%
Average Unit Size 7% 0% 5% -5% -5% 0%
Affordable -15% -15% -15% -15% -15% -15%
Net Adjustments -13% -15% -20% -15% -5% -20%
Adjusted Price Per
Residential Unit
$201,550 $242,857 $232,000 $194,480 $196,786 $266,667
Unadjusted Adjusted
Low $207,143 Low $194,480
Average $262,776 Average $222,390
High $333,333 High $266,667
Median $258,690 Median $216,775
ATTACHMENT 3
Sales Comparison Approach
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Property Rights Appraised The purpose of this adjustment is to account for differences in the property rights transferred with the sale. We are valuing the leasehold interest in the subject property, as reflected by all of the comparables. Thus, no adjustments were required.

Financing Terms The purpose of adjusting for financing terms is to determine cash equivalent sale prices for the comparables in accordance with the definition of market value for this report.

To the best of our knowledge, all of the comparables used in this analysis were accomplished with cash or market-oriented financing. Therefore, no adjustments were required.

Conditions of Sale Condition of sale refers to the motivations of the buyer and seller involved in a particular transaction. However, all comparables used in this analysis are considered to be "arm's-length" market transactions between both knowledgeable buyers and sellers on the open market. Therefore, no adjustments were required.

Market Conditions (Time) The purpose of this adjustment is to account for changes in market conditions. All comparables used in this analysis sold under similar market condition; therefore, no adjustments were required.

Location The subject property is located in Brisbane. Comparable 5 is located in an area with typically lower rental rates, and thus required a 15% upward adjustment. Comparable 3 is located in an area with typically higher rental rates, and thus required a 5% downward adjustment.

Utility All comparables used in this analysis have similar utility; therefore, no adjustments were required.

Size This adjustment accounts for the difference in size between each of the comparables and the subject property. We note that there is an inverse relationship between size and value per residential unit such that smaller properties will sell for higher prices per residential unit and vice versa. The subject and all of the comparables are within a reasonable size range, thus no adjustments were necessary.

Rent Stabilization Level The subject is not rent stabilized. No adjustments were necessary as the comparables have similar rent stabilization levels.

Condition The subject property was constructed in 2000 and is in average condition.

Comparables 1, 3 and 6 are in a superior condition, and thus required downward adjustments. Comparable 4 is in an inferior condition, and thus required an upward adjustment.

Average Unit Size The comparable properties are analyzed on price per unit basis; however, the average unit size can vary among the comparable properties. Typically there is a direct correlation between the average size of a unit and the price per unit. Comparables 4 and 5 have a larger average unit size as compared to the subject, and thus required downward adjustments. Comparables 1 and 3 have a smaller average unit size as compared to the subject, and thus required upward adjustments.

Affordable Comparables 1, 2, 3, 4, 5 and 6 required downward adjustments as they are not affordable projects.

After adjustments, the comparable sales exhibited a range between $194,480 per residential unit and $266,667 per residential unit with an average of $222,390 per residential unit and a median of $216,775 per residential unit. Thus, considering the elements of comparison noted above, our opinion of market value is $225,000 per residential unit.

ATTACHMENT 3
Sales Comparison Approach
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Value Opinion via the Sales Comparison Approach
Date of Value Value Final Value (RD)
Concluded Value Per Residential Unit $225,000 -
Residential Units 14 -
As Is Market Value Via the Sales Comparison Approach January 20, 2026 $3,150,000 $3,150,000 The final value is rounded to the nearest $10,000.

ATTACHMENT 3
Reconciliation & Final Value
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Reconciliation & Final Value
The estimated values arrived at by the approaches to value used in this report are as follows:

Estimated Values
Approach Value Date Conclusion
Cost Approach As Is Market Value N/A Not Applied
Income Capitalization Approach As Is Market Value January 20, 2026 $3,290,000 Sales Comparison Approach As Is Market Value January 20, 2026 $3,150,000 The Cost Approach is traditionally a good indicator of value when properties being appraised are new or close to new. The difficulty in credibly isolating the influence of physical depreciation and obsolescence affects the reliability of the Cost Approach. Investors typically give nominal weight to this analysis once a property is operating on a stabilized basis as its cost bears little relationship to the value; therefore, we exclude this approach from our analysis.

The Income Capitalization Approach is a strong indicator of value when market rents, vacancy rates, stabilized expenses, and/or capitalization/discount rates are based on reliable market data. In this case, given the depth of the market, there are numerous transactions from which to glean points of analysis, lending credibility to the results of the approach. Similar assets are generally acquired for their capacity to generate a return on and of capital, which is why this is the methodology primarily applied by investors. Balancing the previously noted factors, and available points of analysis, most weight is placed on the opinion developed by the Income Capitalization Approach.

The Sales Comparison Approach is reliable when few differences exist between the comparable sales and the subject, and the sales data collected is credible and accurate. Similar property types in competitive locations tend to sell within a consistent range, and this factor makes valuation on a per square foot and per unit basis a strong predictor of value. The Sales Comparison Approach is largely used as a secondary support for our opinion developed in the application of other approaches.

Final Value Conclusion
Value Premise Date of Value Interest Appraised Value Conclusion As Is Market Value January 20, 2026 Leasehold Interest $3,290,000 ATTACHMENT 3
Reconciliation & Final Value
Bowery Valuation 2600045589 52
The value conclusions are subject to the following Extraordinary Assumptions11. We note the use of this/these extraordinary assumption(s) may have affected the assignment results. If the assumption is found to be false as of the effective date of the appraisal, we reserve the right to modify our value conclusions:
• None.

The value conclusions are based on the following Hypothetical Conditions 12 . We note the use of this/these hypothetical conditions(s) may have affected the assignment results:
• We note the property is currently encumbered by a ground lease that expires in 2028. HEART intends to renew this ground lease at a rate of $1 per year upon expiration. We have valued the property as if it is already encumbered by the new ground lease.
• We note there is a community center lease that is coterminous with the ground lease that expires in 2028.

HEART intends to renew this sublease for $1 per year with expense reimbursements for their share of utilities. We have valued the property as if the new lease is in place. • HEART intends to apply for a new regulatory agreement with new maximum allowable rents. At the request of the client, we have valued the property as if the tenants are leasing the units at the proposed maximum allowable rents.
11 The definition of Extraordinary Assumptions can be found in the Glossary of Terms, which is located in the Addenda. 12 The definition of Hypothetical Conditions can be found in the Glossary of Terms, which is located in the Addenda.

ATTACHMENT 3
Certification
Bowery Valuation 2600045589 53
Certification
We certify to the best of our knowledge:
• The statements of fact contained in this report are true and correct. • The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions. • We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.
• We have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding the agreement to perform this assignment.
• We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
• Our engagement in this assignment was not contingent upon developing or reporting predetermined results.
• Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
• Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standard of Professional Practice of the Appraisal Institute, the Uniform Standards of Professional Appraisal Practice, and applicable state appraisal regulations.
• Sam Cimino has made a personal inspection of the property that is the subject of this report on 01/20/2026.

Bryson Young, MAI has not made a personal inspection of the property that is the subject of this report. • No one provided significant real property appraisal assistance to the person signing this certification. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
• As of the date of this report, Bryson Young, MAI has completed the continuing education program for Designated Members of the Appraisal Institute.
• We have experience in appraising properties similar to the subject and are in compliance with the Competency Rule of USPAP.

Bryson Young, MAI
Senior Managing Director
Certified General Real Estate Appraiser
CA License No. AG044713
[email protected]
(650) 334-5404
Sam Cimino
Vice President
Certified General Real Estate Appraiser
CA License No. AG3007042
[email protected]
(408) 592-0697
ATTACHMENT 3
Addenda
Bowery Valuation 2600045589 54
Addenda
Contingent & Limiting Conditions

1. Any legal description or plats reported herein are assumed to be accurate. Any sketches, surveys, plats, photographs, drawings, or other exhibits are included only to assist the intended user to better understand and visualize the subject property, the environs, and the competitive data. We have made no survey of the property and assume no responsibility in connection with such matters.

2. The appraiser has not conducted any engineering or architectural surveys in connection with this appraisal assignment. Information reported pertaining to dimensions, sizes, and areas is either based on measurements taken by the appraiser or the appraiser’s staff or was obtained or taken from referenced sources and is considered reliable. No responsibility is assumed for the costs of preparation or for arranging geotechnical engineering, architectural, or other types of studies, surveys, or inspections that require the expertise of a qualified professional.

3. No responsibility is assumed for matters legal in nature. Title is assumed to be good and marketable and in fee simple unless otherwise stated in the report. The property is considered to be free and clear of existing liens, easements, restrictions, and encumbrances, except as stated.

4. Unless otherwise stated herein, it is assumed there are no encroachments or violations of any zoning or other regulations affecting the subject property and the utilization of the land and improvements is within the boundaries or property lines of the property described and that there are no trespasses or encroachments.

5. Bowery Real Estate Systems, Inc. assumes there are no private deed restrictions affecting the property which would limit the use of the subject property in any way.

6. It is assumed the subject property is not adversely affected by the potential of floods; unless otherwise stated herein.

7. It is assumed all water and sewer facilities (existing and proposed) are or will be in good working order and are or will be of sufficient size to adequately serve any proposed buildings.

8. Unless otherwise stated within the report, the depiction of the physical condition of the improvements described herein is based on visual inspection. No liability is assumed for the soundness of structural members since no engineering tests were conducted. No liability is assumed for the condition of mechanical equipment, plumbing, or electrical components, as complete tests were not made. No responsibility is assumed for hidden, unapparent, or masked property conditions or characteristics that were not clearly apparent during our inspection.

9. If building improvements are present on the site, no significant evidence of termite damage or infestation was observed during our physical inspection, unless so stated in the report. No termite inspection report was available, unless so stated in the report. No responsibility is assumed for hidden damages or infestation.

10. Any proposed or incomplete improvements included in this report are assumed to be satisfactorily completed in a workmanlike manner or will be thus completed within a reasonable length of time according to plans and specifications submitted.

11. No responsibility is assumed for hidden defects or for conformity to specific governmental requirements, such as fire, building, safety, earthquake, or occupancy codes, except where specific professional or governmental inspections have been completed and reported in the appraisal report.

12. Responsible ownership and competent property management are assumed.

ATTACHMENT 3
Addenda
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13. The appraisers assume no responsibility for any changes in economic or physical conditions which occur following the effective date of value within this report that would influence or potentially affect the analyses, opinions, or conclusions in the report. Any subsequent changes are beyond the scope of the report.

14. The value estimates reported herein apply to the entire property. Any proration or division of the total into fractional interests will invalidate the value estimates, unless such proration or division of interests is set forth in the report.

15. Any division of the land and improvement values estimated herein is applicable only under the program of utilization shown. These separate valuations are invalidated by any other application.

16. Unless otherwise stated in the report, only the real property is considered, so no consideration is given to the value of personal property or equipment located on the premises or the costs of moving or relocating such personal property or equipment.

17. Unless otherwise stated, it is assumed that there are no subsurface oil, gas or other mineral deposits or subsurface rights of value involved in this appraisal, whether they are gas, liquid, or solid. Nor are the rights associated with extraction or exploration of such elements considered; unless otherwise stated. Unless otherwise stated it is also assumed that there are no air or development rights of value that may be transferred.

18. Any projections of income and expenses, including the reversion at time of resale, are not predictions of the future. Rather, they are our best estimate of current market thinking of what future trends will be. No warranty or representation is made that these projections will materialize. The real estate market is constantly fluctuating and changing. It is not the task of an appraiser to estimate the conditions of a future real estate market, but rather to reflect what the investment community envisions for the future in terms of expectations of growth in rental rates, expenses, and supply and demand. The forecasts, projections, or operating estimates contained herein are based on current market conditions, anticipated short-term supply and demand factors, and a continued stable economy. These forecasts are, therefore, subject to changes with future conditions.

19. Unless subsoil opinions based upon engineering core borings were furnished, it is assumed there are no subsoil defects present, which would impair development of the land to its maximum permitted use or would render it more or less valuable. No responsibility is assumed for such conditions or for engineering which may be required to discover them.

20. Bowery Real Estate Systems, Inc. representatives are not experts in determining the presence or absence of hazardous substances, defined as all hazardous or toxic materials, wastes, pollutants or contaminants (including, but not limited to, asbestos, PCB, UFFI, or other raw materials or chemicals) used in construction or otherwise present on the property. We assume no responsibility for the studies or analyses which would be required to determine the presence or absence of such substances or for loss as a result of the presence of such substances. Appraisers are not qualified to detect such substances. The client is urged to retain an expert in this field.

21. We are not experts in determining the habitat for protected or endangered species, including, but not limited to, animal or plant life (such as bald eagles, gophers, tortoises, etc.) that may be present on the property. We assume no responsibility for the studies or analyses which would be required to determine the presence or absence of such species or for loss as a result of the presence of such species. The appraiser hereby reserves the right to alter, amend, revise, or rescind any of the value opinions based upon any subsequent endangered species impact studies, research, and investigation that may be provided.

22. No environmental impact studies were either requested or made in conjunction with this analysis. The appraiser hereby reserves the right to alter, amend, revise, or rescind any of the value opinions based upon any subsequent environmental impact studies, research, and investigation that may be provided.

ATTACHMENT 3
Addenda
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23. The appraisal is based on the premise that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in the report; further, that all applicable zoning, building, and use regulations and restrictions of all types have been complied with unless otherwise stated in the report; further, it is assumed that all required licenses, consents, permits, or other legislative or administrative authority, local, state, federal and/or private entity or organization have been or can be obtained or renewed for any use considered in the value estimate.

24. Neither all nor any part of the contents of this report or copy thereof, shall be conveyed to the public through advertising, public relations, news, sales, or any other media, without the prior written consent and approval of the appraisers. This limitation pertains to any valuation conclusions, the identity of the analyst or the firm and any reference to the professional organization of which the appraiser is affiliated or to the designations thereof.

25. Although the appraiser has made, insofar as is practical, every effort to verify as factual and true all information and data set forth in this report, no responsibility is assumed for the accuracy of any information furnished the appraiser either by the client or others. If for any reason, future investigations should prove any data to be in substantial variance with that presented in this report, the appraiser reserves the right to alter or change any or all analyses, opinions, or conclusions and/or estimates of value.

26. If this report has been prepared in a so-called “public non-disclosure” state, real estate sales prices and other data, such as rents, prices, and financing, are not a matter of public record. If this is such a “nondisclosure” state, although extensive effort has been expended to verify pertinent data with buyers, sellers, brokers, lenders, lessors, lessees, and other sources considered reliable, it has not always been possible to independently verify all significant facts. In these instances, the appraiser may have relied on verification obtained and reported by appraisers outside of our office. Also, as necessary, assumptions and adjustments have been made based on comparisons and analyses using data in the report and on interviews with market participants. The information furnished by others is believed to be reliable, but no warranty is given for its accuracy.

ATTACHMENT 3
Addenda
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Subject Property Photos
All subject photos were taken on the date of value of this appraisal.

Building Facade Building Facade
Building Facade Building Facade
Building Facade Building Facade
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Subject Street Subject Street
Subject Street Subject Street
Subject Street Subject Street
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Subject Street Subject Street
Subject Street Subject Street
Subject Street Subject Street
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Typical Kitchen Typical Kitchen
Typical Kitchen Typical Kitchen
Typical Bathroom Typical Bathroom
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Typical Bathroom Typical Bathroom
Typical Bathroom Typical Bedroom
Typical Bedroom Typical Bedroom
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Typical Bedroom Typical Bedroom
Typical Living Room Typical Living Room
Typical Living Room Typical Living Room
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Recreation Room Recreation Room
Laundry Room Parking
Parking Parking
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Map Gallery
Zoning Map
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Flood Map
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Rent Roll & Financial Statements
8 Visitacion Avenue
# Unit # Unit Type Bedrooms Bathrooms SF Rent Type Monthly Rent Bowery Rent Estimate Rent/SF 1 I1 60% AMI 2 1 833 Affordable $2,379.00 $2,379 $34.27 2 I2 120% AMI 2 1 833 Affordable $2,900.00 $2,900 $41.78 3 I3 30% AMI 1 1 694 Affordable $1,010.00 $1,010 $17.46 4 I4 30% AMI 1 1 694 Affordable $1,010.00 $1,010 $17.46 5 I5 60% AMI 1 1 718 Affordable $2,130.00 $2,130 $35.60 6 I6 120% AMI 1 1 699 Affordable $2,000.00 $2,000 $34.33 7 V1 60% AMI 1 1 761 Affordable $2,130.00 $2,130 $33.59 8 V10 30% AMI 1 1 695 Affordable $1,010.00 $1,010 $17.44 9 V2 50% AMI 1 1 695 Affordable $1,756.00 $1,756 $30.32 10 V4 60% AMI 1 1 695 Affordable $2,130.00 $2,130 $36.78 11 V5 120% AMI 1 1 695 Affordable $2,000.00 $2,000 $34.53 12 V6 60% AMI 1 1 695 Affordable $2,130.00 $2,130 $36.78 13 V8 120% AMI 1 1 695 Affordable $2,000.00 $2,000 $34.53 14 V9 60% AMI 1 1 763 Affordable $2,130.00 $2,130 $33.50 Totals/Avgs 16 14 10,165 $26,715.00 $26,715 $31.54
Annual $320,580.00 $320,580
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Addenda
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Provided Documents

12.01.25 Rent Roll
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Enclosure M - 2024 Audited Financial Statement
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Enclosure N - 2025 Budget
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Enclosure K - 2022 Audited Financial Statement
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Enclosure L - 2023 Audited Financial Statement
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Insurable Replacement Cost
In estimating the insurable replacement cost we have followed traditional appraisal standards and industry practices in using the calculator cost method of Marshall Valuation Service. This estimate is based on the replacement cost new of the building improvements less deductions for typical insurable exclusions. It is noted that actual construction costs and related estimates can vary greatly from this estimate.

It is noted that methodologies for developing insurable replacement costs vary dependent upon underwriter standards. We have not viewed the specific policy that is in effect or may be written for the subject, nor have we been given specific instructions by the client on what is to be included in or excluded from the insurable replacement cost estimate.

This is provided to aid the client/intended user in their overall decision-making process. We recommend the engagement of an appropriately qualified professional if a definitive estimate of insurable replacement cost for insurance coverage is required.

The indicated insurable replacement cost is shown on the following page.

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Insurable Value
Indicated Insurable Value
Building Component Building 1 Total
Grade
Building Type
Class
Class Type
Finished / Unfinished
MVS Section
MVS Page
Manual Dated
Base Unit Cost New PSF $0.00
Refinements
Add HVAC / Climate Adjustment $0.00
Elevator (Addition or Deduction) $0.00
Add Sprinklers $0.00
Adjusted Base Unit Cost New PSF $0.00
Multipliers
Number of Stories Multiplier 1.000
Height/Story Multiplier 1.000
Floor Area/Perimeter Multiplier 1.000
Current Cost Multiplier 1.000
Local Multiplier 1.000
Complex/Congested Sites Multiplier 1.000
Total Multiplier 1.000
Adjusted Replacement Cost New PSF $0.00
Area 0
Replacement Cost New $0 $0
Less Insurance Exclusions
Total Exclusions (%) 0%
Total Exclusions ($) $0.00
Indicated Insurable Replacement Cost $0 $0
Rounded Indicated Insurable Replacement Cost $0 $0
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Comparable Sales Outline
Comparable Sale 1
Location Overview
Street Address 578-586 Guerrero Street
City San Francisco
State CA
Zip 94110
Property ID 3578-013
Market San Francisco
Submarket Mission Dolores
Property Information
Condition Average
Year Built 1913
# Floors 3
Building Type Walk Up
Building Class C
Zoning NC1
GBA 3,635 SF
Site Area 2,040 SF
Residential Units 6
Comparable Type Multifamily
Commercial Units 0
Commercial Area 0 SF
Average Unit Size 606 SF
Unit Types Studio, 1 BR, 2 BR
Sale Information
Sale Status Transaction
Sale Date 10/21/2025
Grantee Carrie G Huie
Grantor Shek Kwong Lee | Lucy S Zee
Unique Sale ID 87885
Deed Sale Price $1,390,000
Per Unit $231,667
Per SF $382
Cap Rate 7.03%
Property Rights Leased Fee Interest
Appraiser Comments
This is the sale of a six-unit multifamily property located at 578-586 Guerrero Street in San Francisco, California. The property, built in 1913, consists of three floors and is in average condition. Each residential unit has an average size of approximately 605.8 square feet, and the building has a 100% occupancy rate. The sale price was $1,390,000 with a reported cap rate of 7.03%. The property is situated in the Mission Dolores submarket of San Francisco and falls under the NC1 zoning. Nearby amenities include a variety of restaurants, cafes, shops, and public transportation options.

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Comparable Sale 2
Location Overview
Street Address 132 Southwood Drive
City San Francisco
State CA
Zip 94112
Property ID 013-044-030
Market San Mateo
Submarket Avalon
Property Information
Condition Average
Year Built 1958
# Floors 2
Building Type Walk Up
Building Class C
GBA 5,440 SF
Site Area 6,421 SF
Residential Units 7
Comparable Type Multifamily
Commercial Units 0
Commercial Area 0 SF
Average Unit Size 777 SF
Sale Information
Sale Status Transaction
Sale Date 9/5/2025
Grantee Wilkinson Construction, Inc
Grantor Doreen D Peluffo
Unique Sale ID 44953
Deed Sale Price $2,000,000
Per Unit $285,714
Per SF $368
Cap Rate 7.36%
Property Rights Leased Fee Interest
Appraiser Comments
This is the sale of a 7-unit multifamily property located at 132 Southwood Drive in San Francisco, California. The property sold for $2,000,000 on September 5, 2025. The building, constructed in 1958, consists of two floors and has a total gross building area of 5,440 square feet. Each residential unit has an average size of approximately 777 square feet, and the property maintains full occupancy. The reported cap rate for this transaction was 7.36%. The sale was an arms-length transaction involving the seller, Doreen D Peluffo, and the buyer, Wilkinson Construction, Inc. The price per square foot was $367.65, and the price per unit was approximately $285,714.28.

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Comparable Sale 3
Location Overview
Street Address 1116 Douglas Ave.

City Burlingame
State CA
Zip 94010
Property ID 029-132-150
Market San Mateo
Submarket Downtown Burlingame
Property Information
Condition Average
Year Built 1936
# Floors 2
Building Type Walk Up
Building Class C
Zoning Multifamily Residential
Parking 10
GBA 5,253 SF
Site Area 9,148 SF
Residential Units 10
Comparable Type Multifamily
Commercial Units 0
Commercial Area 0 SF
Average Unit Size 525 SF
Unit Types Studio
Sale Information
Sale Status Transaction
Sale Date 7/28/2025
Grantee Constructive Solutions Inc
Grantor BBDO San Francisco
Unique Sale ID 38344
Deed Sale Price $2,900,000
Per Unit $290,000
Per SF $552
Cap Rate 3.82%
Property Rights Leased Fee Interest
Appraiser Comments
The property at 1116 Douglas Avenue in Burlingame, California, is a multifamily residential building with 10 residential units. The property was sold to Constructive Solutions Inc. by BBDO San Francisco for $2,900,000 on July 28, 2025. The building, constructed in 1936, features two floors and offers 10 parking spaces. The sale price equates to $552.07 per square foot and $290,000 per unit. The property is situated in the Downtown Burlingame submarket of the San Mateo market. Nearby amenities include various dining options, shopping centers, and recreational facilities. The street is a well-established residential area known for its tree-lined sidewalks and proximity to local schools and parks.

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Comparable Sale 4
Location Overview
Street Address 1102 Mason St.

City San Francisco
State CA
Zip 94108
Property ID 02120-20A
Neighborhood/District Nob Hill
Property Information
Condition Average
Year Built 1909
# Floors 2
Building Type Walk Up
GBA 5,344 SF
Site Area 2,108 SF
Residential Units 5
Comparable Type Multifamily
Commercial Units 0
Average Unit Size 1,069 SF
Sale Information
Sale Status Transaction
Sale Date 6/12/2025
Grantee CLAY MASON LLC
Grantor ANDERSEN IRENE P
Unique Sale ID 42783
Deed Sale Price $1,144,000
Per Unit $228,800
Per SF $214
Cap Rate 5.30%
Property Rights Leased Fee Interest
Verification Source
Contact Name Dan McGue
Company Coldwell Banker
Email [email protected]
Role Listing Broker
Verification Date 7/16/2025
Number 415-310-5787
Appraiser Comments
This property is a two-story multifamily building located at 1102 Mason St. in the Nob Hill neighborhood of San Francisco, California. The property was built in 1909 and consists of five residential units. The sale closed for $1,144,000 on June 12, 2025, with a reported cap rate of 5.30%. Nearby amenities include restaurants, shops, and parks, making it a desirable location for residents. The sale details were verified by Dan McGue of Coldwell Banker on July 16, 2025.

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Comparable Sale 5
Location Overview
Street Address 116 San Luis Avenue
City San Bruno
State CA
Zip 94066
Property ID 021-164-120
Market San Mateo
Submarket San Bruno
Property Information
Condition Average
Year Built 1964
# Floors 2
Building Type Walk Up
Building Class C
Zoning C0001P
GBA 6,660 SF
Site Area 7,100 SF
Residential Units 7
Comparable Type Multifamily
Commercial Units 0
Commercial Area 0 SF
Average Unit Size 914 SF
Unit Types 2 BR
Sale Information
Sale Status Transaction
Sale Date 2/14/2025
Grantee John F Britton
Grantor Ogihara Revocable Trust
Unique Sale ID 6670
Deed Sale Price $1,450,000
Per Unit $207,143
Per SF $218
Cap Rate 6.35%
Property Rights Leased Fee Interest
Appraiser Comments
This is the sale of a multifamily property located at 116 San Luis Avenue in San Bruno, California. The property consists of seven residential units with an average unit size of 914 square feet. The building was constructed in 1964 and has two floors. The property was last sold on February 14, 2025, for $1,450,000. The sale price equates to approximately $217.72 per square foot and $207,142.86 per unit. The occupancy rate at the time of sale was 100%, and the reported cap rate was 6.35%. The property rights are leased fee interest.

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Comparable Sale 6
Location Overview
Street Address 198 West Moltke Street
City Daly City
State CA
Zip 94014
Property ID 003-302-340
Market San Mateo
Submarket Hillside
Property Information
Condition Average
Year Built 1931
# Floors 2
Building Class C
Zoning R
GBA 5,979 SF
Site Area 4,320 SF
Residential Units 6
Comparable Type Multifamily
Commercial Units 0
Average Unit Size 750 SF
Unit Types 1 BR, 2 BR
Exposure/Marketing Time 50 Days
Sale Information
Sale Status Transaction
Sale Date 9/12/2024
Grantee D & C Lee Management
Grantor Alex Kolenko
Unique Sale ID 048213
Deed Sale Price $2,000,000
Per Unit $333,333
Per SF $335
Cap Rate 4.70%
Property Rights Leased Fee Interest
Verification Source
Contact Name Valerie Hinton
Company Valerie Hinton, Broker
Role listing broker
Verification Date 4/14/2025
Appraiser Comments
This is a transaction between 2 private individuals. The cap rate is confirmed with the listing broker.

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San Mateo County Area Analysis
The following analysis includes pertinent aspects of the surrounding region as it pertains to the subject property.

This report was compiled using data as of 2025 Q2 unless otherwise noted. Data is from a number of sources including the U.S. Bureau of Labor Statistics ("BLS"), the U.S. Bureau of Economic Analysis ("BEA"), and the U.S.

Census Bureau.

Source: Google Maps
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San Mateo County at a Glance
San Mateo County is located in California and is included in the San Francisco-Oakland-Berkeley, CA MSA. It is considered to be suburban in nature, being located south of the city of San Francisco. The county is home to several cities, including San Mateo, Redwood City, and Pacifica. The economy of San Mateo County is largely driven by the technology industry, with many major tech companies having headquarters or offices in the area. Some of the top employers in the county include Google, Oracle, and Facebook. Other companies include Visa Inc, Sony Interactive Entertainment, Electronic Arts, YouTube, Genentech, GoPro, and Gilead Sciences, as well as a hub of venture capital firms in Menlo Park and several other technology-related companies. There is also a thriving retail and tourism industry, with the county being home to several shopping centers and popular tourist destinations such as the Half Moon Bay State Beach and the Pacifica State Beach. Housing options in San Mateo County range from urban apartments to suburban single-family homes. The cost of living in the area is relatively high, with a median home price above the national average. However, there are a variety of affordable housing options available for residents, including subsidized housing and affordable rental options. The coastal Santa Cruz Mountain range bisects San Mateo, leaving the western side to more rural uses such as agriculture, game preserve, watershed, parks and undeveloped lands. Community parks and green spaces are abundant in San Mateo County, with several large regional parks, such as the San Francisco Watershed and the Edgewood Park and Natural Preserve, as well as smaller neighborhood parks and open spaces. The county is served by several major roads, including the I-280 and I-101 freeways, which provide access to nearby cities and destinations. Public transit options in San Mateo County include the Caltrain commuter rail service, which connects the county to San Francisco and other nearby cities, as well as several bus lines operated by the San Mateo County Transit District. The county is also located near the San Francisco International Airport, making air travel convenient for residents and visitors.

Area Fundamentals
Attribute County Level Value
5 Year Annualized
Growth Rate Relative to Baseline (MSA)
Employment 400,482 2.0% Faster than MSA
GDP $186.3 billion 7.8% Faster than MSA
Population 742,893 -0.6% Slower than MSA
Per Capita Personal Income $172,828 8.0% Faster than MSA Labor Market Conditions
According to the latest data from the Q4 2024 Quarterly Census of Employment and Wages, San FranciscoOakland-Hayward employed 2,071,652 private employees, with establishments in the Professional & Business Services, Education & Health Services, and Trade, Transportation, & Utilities industries accounting for the top three employers. These industries employ 472,758 (22.8%), 410,835 (19.8%), and 351,027 (16.9%) private sector workers in the Metro, respectively. San Francisco-Oakland-Hayward has an especially large share of workers in the Information industry. In fact, its 5.9% fraction of workers is 2.8 times higher than the National average.

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Source: U.S. Bureau of Labor Statistics
The latest data from the 2024 Q4 Quarterly Census of Employment and Wages, San Mateo County employed 413,595 employees. Establishments in the Professional & Business Services, Education & Health Services, and Trade, Transportation, & Utilities industries accounted for the top three employers. These industries employ 96,767 (23.4%), 76,603 (18.5%), and 71,877 (17.4%) workers in the County, respectively. San Mateo County has an especially large share of workers in the Information industry. In fact, its 9.4% fraction of workers is 5.0 times higher than the National average.

Source: U.S. Bureau of Labor Statistics
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At the onset of the pandemic last spring, San Mateo County area employers shed 16.2% of their workforce, expanding the unemployment rate from 2.2% in February 2020 to 12.5% just two months later. The unemployment rate in San Mateo County has expanded over the past year to the current rate of 4.1%, just slightly below the San Francisco-Oakland-Hayward rate of 4.7%. As of 06/25, total employment is up 0.1% on a year-over-year basis. The unemployment rate remains above its pre-pandemic level (Feb 2020) of 2.2%.

Source: U.S. Bureau of Labor Statistics
Economic Production
Source: U.S. Bureau of Economic Analysis
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Demographics
Going back ten years, San Mateo County's population has compressed 0.2% per annum to the 2024 count of 742,893. Over the past five years, growth has declined, contracting 0.6% per annum since 2019. This growth rate falls short of the Nation, which has expanded 0.7% per year over the last five years.

Going back five years, San Mateo County residents' per capita personal income has expanded 8.0% per annum to the 2023 level of $172,828. Over the past three years, growth has declined, growing 7.4% per annum since 2020.

This growth rate exceeds the Nation, which has expanded 5.8% per year over the last three years.

Source: U.S. Census Bureau
Infrastructure
Transportation Methods
San Mateo County has an extensive highway network. It is served by several interstate highways including Interstate 280, Interstate 380, and U.S. Route 101.

Caltrain, the commuter rail system, traverses the county from north to south, running alongside the Highway 101 corridor for most of the way. Bay Area Rapid Transit (BART) trains serve San Francisco International Airport and the northern portion of the county, terminating at Millbrae. Caltrain, BART, and SamTrans converge at the Millbrae Intermodal station.

SamTrans (San Mateo County Transit District) provides local bus service within San Mateo County. Local and commuter bus routes also operate into San Francisco.

The county is also located near the San Francisco International Airport, making air travel convenient for residents and visitors.

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Housing
The housing market has undergone significant shifts since 2021, when low mortgage rates and remote work trends fueled unprecedented demand and price growth, pushing the median listing price in the US to $413,000 by mid2022. The subsequent aggressive interest rate hikes in late 2022 and throughout 2023 dramatically impacted affordability, cooling demand and moderating price growth in many markets. By 2025, we've seen mortgage rates stabilize and gradually decline, restoring some buyer confidence while persistent inventory constraints in highdemand areas continue to support price resilience. Markets now show greater regional variation with some areas experiencing renewed price growth while others maintain more balanced conditions between buyers and sellers.

In San Mateo County, Realtor.com data points to negative growth in values over the past year. As of 07/2025, the median home list price sits at $1,496,500, a decrease of 2.7% compared to a decrease of 0.5% for the San FranciscoOakland-Hayward Metro, and an increase of 0.2% across the Nation over the past year. The county median list price has experienced no change of 0.0% over the past 3 months, compared to a decrease of 0.5% for the San FranciscoOakland-Hayward Metro in the same period.

Source: Realtor.com
Outlook
The United States economy is experiencing some headwinds in early 2025, with Q1 GDP declining by 0.3% after several quarters of modest growth. Recently implemented tariffs have created uncertainty in international trade and supply chains, putting pressure on consumer prices and business operations. While labor markets remain relatively resilient, the Federal Reserve faces a complex balance between addressing slowing economic growth and managing inflation pressures that have been exacerbated by trade policy changes. Businesses are adapting to these conditions with cautious investment strategies as they navigate economic uncertainty in the near term.

The current unemployment rate in San Mateo County of 4.1% is below its five-year average. By contrast, that rate is also below the state rate of 5.4%, but equal to the national rate of 4.1%. Although San Mateo County has experienced population decline of 0.6% per year annually over the past five years, growth has returned to positive levels with a most recent one-year growth rate of 1.2%. Considering its strong positive growth relative to the nation as a whole over the five years prior to the pandemic, its diversified economy, and its recently growing population, the county boasts all the attributes necessary for near- and long-term growth.

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San Francisco: Multifamily Market Analysis
The information contained in this report was provided using 2025 Q3 CoStar data for the San Francisco Multifamily Market ("Market").

Overview
The subject property is in the San Francisco Market defined in the map above, which includes 190.3k units of multifamily space. The inventory is roughly 18% Class A, 26% Class B, and 56% Class C. The multifamily market is showing signs of improvement following a prolonged adjustment period. Vacancy held at 8.2% in Q3 2025, marking its first quarter without an increase since 2022, while new starts have declined sharply. Investment sentiment strengthened with cap rates stabilizing near 6.1% and transaction volume reaching $35 billion. As absorption catches up to deliveries, the sector appears positioned for gradual rent growth recovery through 2026. In the San Francisco Market, demand remains strong with vacancy rates down yoy and over the past quarter, decreasing -164 bps yoy to 4.4%. Despite this, rents are up 6.3% over the past year, increasing by 0.9% in the latest quarter. With market conditions improving, values increased 0.3% over the past quarter to $527,529/unit.

Sector Fundamentals
San Francisco YoY QoQ National YoY QoQ
Market Rent/Unit $3,302 6.33% 0.92% $1,746 0.6% -0.69%
Vacancy Rate 4.39% -164 bps -44 bps 8.24% 14 bps 4 bps
Net Absorption Units 1,012 20.8% -11.5% 121,088 -20.7% -16.7% Asset Value/Unit $527,529 0.1% 0.3% $238,269 -0.2% -0.7% Market Cap Rate 4.55% 4 bps -1 bps 6.09% -1 bps -1 bps
Transaction Count 65 18% -54% 3,246 9% -1%
Sales Volume $621,298,112 33% -22% $34,934,362,112 22% 25% The table below presents historical performance of key indicators for multifamily space in the Market including inventory & construction levels, net absorption, vacancy & availability, rental rates, pricing, and cap rates.

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Historical Multifamily Performance: San Francisco Market Period
Inventory
Units
Under
Construction
Units
Net
Delivered
Units 12
Mo
Absorption
Units 12 Mo
Vacancy
Rate
Market
Effective
Rent/Unit
Asset
Value/Unit
Market
Cap
Rate
2025 Q3 190,253 2,014 1,425 4,459 4.4% $3,302 $527,529 4.55% 2025 Q2 190,075 1,514 2,016 4,285 4.8% $3,272 $525,884 4.57% 2024 188,828 2,743 2,792 4,214 5.5% $3,127 $524,915 4.54% 2023 186,036 4,921 1,122 1,957 6.3% $3,022 $549,016 4.36% 2022 184,914 4,087 2,025 3,462 6.8% $3,046 $634,555 3.77% 2021 182,889 3,389 2,745 7,780 7.7% $2,998 $702,408 3.38% 2020 180,144 4,993 2,855 -5,961 10.6% $2,791 $621,402 3.66% 2019 177,289 6,724 2,059 810 5.8% $3,071 $652,897 3.67% 2018 175,230 5,479 2,453 2,787 5.1% $3,026 $639,037 3.71% 2017 172,776 4,781 3,782 3,126 5.4% $2,921 $613,999 3.75% 2016 168,994 5,654 3,437 3,266 5.1% $2,871 $596,159 3.80% 2015 165,557 8,298 2,492 1,898 5.1% $2,873 $581,156 3.80% Supply & Demand
The Market has 190.3k units of multifamily space, and developers have added, net of demolitions, 24.7k units over the past ten years, increasing inventory by 14.9% during that time. Despite an increase in supply over the past ten years, absorption levels have outpaced it, and vacancy rates are lower than they were a decade ago, compressing from 5.1% to 4.4%.

Despite an increase in inventory levels over the past year, demand has outpaced it, and vacancy rates have compressed 164 bps over the past year from 6.0% to 4.4%, remaining below the 10-year average of 6.3%, and below the National average by 385 bps. With 1k units absorbed in 2025 Q3, vacancy rates have compressed 44 bps over the past quarter. In the third quarter, multifamily tenants in the Market absorbed 1k units, a decrease from the

1.1k units absorbed in 2025 Q2, but an improvement from the 838 units absorbed in the same quarter last year.

Vacancy Rates
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
2025
Q2
2025
Q3
National 6.3% 6.6% 6.8% 6.6% 6.6% 6.8% 5.1% 6.6% 7.8% 8.3% 8.2% 8.2% Market 5.1% 5.1% 5.4% 5.1% 5.8% 10.6% 7.7% 6.8% 6.3% 5.5% 4.8% 4.4% Class A 8.6% 7.6% 9.7% 4.8% 8.8% 20.3% 13.3% 9.6% 10.2% 9.5% 8.4% 6.6% Class B 5.0% 5.8% 5.5% 6.7% 6.1% 10.7% 7.6% 7.6% 6.4% 4.7% 4.2% 3.9% Class C 4.7% 4.5% 4.5% 4.6% 5.0% 8.1% 6.2% 5.7% 5.2% 4.6% 4.0% 3.9% ATTACHMENT 3
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Source: CoStar
Rents
At $3,302/unit, rents in the San Francisco Market are roughly 89% higher than the National average of $1,746/unit.

Rents vary throughout the Market. Class A apartment units are a premium with an average effective rent rate of $4,184/unit, followed by $3,377/unit for Class B and $2,601/unit for Class C units. Rents in the Market have grown

1.5% per annum over the past decade, falling short of the National average, where rents increased 3.3% per annum during that time.

Market Rents
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
2025
Q2
2025
Q3
National $1,309 $1,341 $1,374 $1,419 $1,468 $1,482 $1,630 $1,695 $1,711 $1,729 $1,758 $1,746 Market $2,873 $2,871 $2,921 $3,026 $3,071 $2,791 $2,998 $3,046 $3,022 $3,127 $3,272 $3,302 Class A $3,689 $3,659 $3,708 $3,880 $3,946 $3,355 $3,773 $3,835 $3,701 $3,886 $4,146 $4,184 Class B $2,930 $2,897 $2,945 $3,031 $3,067 $2,811 $3,006 $3,051 $3,069 $3,181 $3,333 $3,377 Class C $2,236 $2,281 $2,330 $2,403 $2,442 $2,366 $2,431 $2,472 $2,491 $2,533 $2,589 $2,601 Prior to the pandemic, the San Francisco Multifamily Market experienced softening rent growth. In 2019 Q4, annual rent growth in the Market softened below the previous quarter, and was below the historical average, with annual growth of 1.5%. With demand softening during the initial stages of the pandemic, quarterly rent growth decreased

2.9% in 2020 Q2. By the end of 2020, rents fell 9.1% from the 2019 Q4 rent level of $3,071/unit. From 2019 Q4 to 2021 Q4, rents decreased -2.4%. Quarterly rent growth in 2025 Q3 slowed by 0.92%, although annual growth increased to 6.3%.

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Source: CoStar
Construction & Future Supply
Developers have been active for much of the past ten years. In fact, they have added 25.4k units to the Market over that time, expanding inventory by 14.9%. Developers remain active in the Market, but elevated construction and debt costs have slowed the pipeline to 2k units, or the equivalent of 1.1% of existing inventory, underway. Demand in the San Francisco Market has outpaced new deliveries over the past year but could slow along with softening economic growth.

Source: CoStar
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Capital Markets
Investors have been active in the Market over the past three years. During that time, investors have closed on average 220 transactions per year with an annual average sales volume of $1.9 billion. Over the past year, there were 341 closed transactions across 8k units, for a total sales volume of $2.9 billion. As of 2025 Q3, CoStar data indicates there were 65 transactions for a total sales volume of $621.3 million, compared to $797.1 million in the previous quarter.

Source: CoStar
Market pricing, based on the estimated price movement of all properties in the Market, is currently $527,529/unit.

Values have increased 0.1% over the past year and 0.3% in 2025 Q3. Capitalization rates increased 4 bps over the past year to 4.5% and compressed 1 bps in 2025 Q3.

Source: CoStar
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Outlook
Multifamily market conditions in the San Francisco Market indicate growing demand that has outpaced an increase in inventory. With positive absorption, vacancy rates have compressed over the past year. With vacancy rates compressing, quarterly rent growth slowed by 0.9%, increasing annual growth 6.3%. Looking ahead to the near term, it is likely that tenant demand remains strong, outpacing an active pipeline, putting downward pressure on vacancy rates, increasing rent growth.

Appendix
San Francisco Multifamily Market Overview
Submarket
Inventory
Units
Vacancy
Rate
Under
Construction
Units
Market
Effective
Rent/Unit
Asset
Value/Unit
Market Cap
Rate
Downtown San Francisco 25,279 5.1% 0 $2,969 $510,084 4.53% San Mateo/Burlingame 22,103 4.7% 601 $3,305 $572,839 4.37% HaightAshbury/Castro/Noe
Vly/Mission
21,874 3.7% 0 $3,358 $554,350 4.54%
Richmond/Western
Addition
19,246 3.2% 8 $2,822 $509,303 4.52%
Redwood City/Menlo Park 17,295 4.2% 520 $3,342 $540,888 4.54% Marina/Pacific
Heights/Presidio
15,054 3.4% 18 $3,994 $659,584 4.29%
South Of Market 13,562 4.6% 124 $3,940 $517,104 4.73%
Civic Center/Tenderloin 11,016 6.1% 0 $2,529 $355,660 4.84% Sunset/Lakeshore 9,406 7.7% 0 $2,820 $480,175 4.75%
S San Francisco/San
Bruno/Millbrae
8,892 3.6% 464 $3,129 $554,198 4.70%
Mission Bay/China
Basin/Potrero Hill
8,202 4.6% 65 $4,389 $574,870 4.81%
Daly City/Brisbane 7,776 1.6% 214 $2,629 $426,483 4.37% Foster City/Redwood
Shores
5,667 3.0% 0 $3,545 $515,631 4.45%
Pacifica 2,294 2.3% 0 $2,960 $418,507 4.81%
Bayview/Visitacion Valley 1,383 5.6% 0 $2,906 $470,221 4.81% Treasure/Yerba Buena
Islands
858 22.9% 0 $3,221 $597,399 4.69%
Outlying San Mateo
County
346 2.4% 0 $2,101 $415,789 4.88%
ATTACHMENT 3
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Bowery Valuation 2600045589 166
Qualifications
Bryson Young, MAI
Senior Managing Director
Experience
Bryson Young is the Senior Managing Director of California for Bowery Valuation and joined the firm in December of 2021. He has oversight of a growing team of appraisers in both the Bay Area as well as Los Angeles. He has worked in the commercial real estate industry for over 20 years, with over 15 years in the commercial appraisal space. During his appraisal career, Bryson has worked on the valuation of a wide range of property types, including existing and proposed market-rate and affordable multi-family housing, low-rise and high-rise office, R&D, retail, industrial, automotive dealerships, and development land throughout the Southwest and the Midwest, with primary concentration within the Northern and Southern California market areas. He has expertise in institutional and noninstitutional multi-family properties, having appraised well over 50,000 apartment units over his career. His team at Bowery consistently appraises 100s of multifamily and mixed-use (residential/commercial) assignments annually. In addition, Bryson and his team appraise well over 5 million square feet of Office/R&D/Industrial in California annually.

Before joining Bowery, Bryson was a Vice President at CBRE, where he was a top producer in Northern California and responsible for training and oversight of a team of appraisers in the Silicon Valley office. Bryson spent over ten years within the appraisal department at CBRE prior to assisting with the launch of Bowery on the West Coast.

Bryson graduated from Northwestern University where he was a scholarship member of the golf team.

Education
Northwestern University Bachelor of Science in Communication Studies with a minor in Business Institutions
Certifications & Professional Designations
Appraisal Institute MAI, Designated Member
Bryson is currently certified by the Appraisal Institute’s voluntary program of continuing education for its designated members.

Certified General Real Estate Appraiser State of Arizona (# CGA-1044972) State of California (# AG 044713)
State of Colorado (# CG200003943)
State of Nevada (# A.0208642-CG)
State of Utah (# 13248853-CG00)
Sam Cimino
Vice President
ATTACHMENT 3
Addenda
Bowery Valuation 2600045589 167
Experience
Sam Cimino is a Vice President at Bowery Valuation who joined the firm in December 2021. He has worked in the real estate appraisal industry since 2015, with more than 6 years in the commercial appraisal space. Throughout his career, Sam has appraised millions of square feet over a variety of property types, including existing and proposed, industrial, auto dealerships, Office/R&D, retail, and development land throughout all of California. Additionally, Sam has appraised tens of thousands of units of institutional and non-institutional multifamily properties, including both market rate and affordable housing, both existing and proposed.

Prior to joining the appraisal department, Sam was a member of the CBRE research team responsible for tracking, analyzing, and reporting market and submarket statistics for all major asset classes, as well as supporting a brokerage team that included some of the highest producing leasing and sales brokers in the Silicon Valley market.

Education
San Jose State University Bachelor of Art in Radio, TV, and Film Certifications & Professional Designations
Certified General Real
Estate Appraiser
State of California (# 3007042)
Licenses
Bryson Young, MAI, State Certified General Appraiser– California Sam Cimino, State Certified General Appraiser– California ATTACHMENT 3
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Letter of Engagement
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Glossary of Terms
Unless otherwise noted, The Dictionary of Real Estate Appraisal, 7th edition (Chicago: Appraisal Institute, 2022) is the source of the following definitions.

Absolute Net Lease A lease in which the tenant pays all expenses including structural maintenance, building reserves, and management; often a long-term lease to a credit tenant.

Absorption Period The actual or expected period required from the time a property, group of properties, or commodity is initially offered for lease, purchase, or use by its eventual users until all portions have been sold or stabilized occupancy has been achieved.

Absorption Rate 1. Broadly, the rate at which vacant space in a property or group of properties for sale or lease has been or is expected to be successfully sold or leased over a specified period of time. 2. In subdivision analysis, the rate of sales of lots or units in a subdivision.

Arm's Length Transaction A transaction between unrelated parties who are each acting in his or her own best interest.

Condominium An attached, detached, or stacked unit within or attached to a structure with common areas that are held as tenants in common (an undivided interest) with other owners in the project. The units can be residential, commercial, industrial, or parking spaces or boat docks. These units are commonly defined by state laws in their locations. Because units can be stacked on top of other units, these units can be defined both vertically and horizontally.

Cooperative A unit in a building owned by a corporation or trust in which each unit owner purchases stock representing the value of a single apartment unit and receives a proprietary lease as evidence of title. Sometimes abbreviated as co-op.

Deferred Maintenance Items of wear and tear on a property that should be fixed now to protect the value or income-producing ability of the property, such as a broken window, a dead tree, a leak in the roof, or a faulty roof that must be completely replaced. These items are almost always curable.

Depreciation A loss in property value from any cause; the difference between the cost of an improvement on the effective date of the appraisal and the market value of the improvements on the same date.

Direct Capitalization A method used to convert an estimate of a single year's income expectancy into an indication of value in one direct step, either by dividing the net income estimate by an appropriate capitalization rate or by multiplying the income estimate by an appropriate factor. This technique employs capitalization rates and multipliers extracted from sales.

Direct capitalization employs capitalization rates and multipliers extracted or developed from market data. Only one year's income is used. Yield and value changes are implied, but not explicitly identified.

Discounted Cash Flow
(DCF)
The procedure in which a discount rate is applied to a set of projected income streams and a reversion. The analyst specifies the quantity, variability, timing, and duration of the income streams and the quantity and timing of the reversion, and discounts each to its present value at a specified yield rate.

Effective Date 1. The date on which the appraisal opinion applies. (SVP) 2. The date to which an appraiser's analyses, opinions, and conclusions apply; also referred to as date of value. (USPAP, 2024 ed.) 3. The date that a lease goes into effect.

Effective Gross Income
(EGI)
The anticipated income from all operations of real property adjusted for vacancy and collection losses.

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Addenda
Bowery Valuation 2600045589 177
Entrepreneurial Incentive The amount an entrepreneur expects or wants to receive as compensation for providing coordination and expertise and assuming the risks associated with the development of a project. Entrepreneurial incentive is the expectation of future reward as opposed to the profit actually earned on the project.

Entrepreneurial Profit (1) A market-derived figure that represents the amount an entrepreneur receives for his or her contribution to a project and risk; the difference between the total cost of a property (cost of development) and its market value (property value after completion), which represents the entrepreneur's compensation for the risk and expertise associated with development. An entrepreneur is motivated by the prospect of future value enhancement (i.e., the entrepreneurial incentive). An entrepreneur who successfully creates value through new development, expansion, renovation, or an innovative change of use is rewarded by entrepreneurial profit. Entrepreneurs may also fail and suffer losses. (2) In economics, the actual return on successful management practices, often identified with coordination, the fourth factor of production following land, labor, and capital; also called entrepreneurial return or entrepreneurial reward.

Equity Dividend The portion of net operating income that remains after total mortgage debt service is paid but before ordinary income tax on operations is deducted; also called equity cash flow.

Equity Dividend Rate See Equity Capitalization Rate
Equity Capitalization Rate An income rate that reflects the relationship between one year's equity cash flow and the equity investment; also called the cash-on-cash rate, cash flow rate, cash throw-off rate.

Excess Land Land that is not needed to serve or support the existing use. The highest and best use of the excess land may or may not be the same as the highest and best use of the improved parcel. Excess land has the potential to be sold separately and is valued separately.

Exposure Time (1) The time a property remains on the market. (2) An opinion, based on supporting market data, of the length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. (USPAP, 2024 ed.) Extraordinary Assumption An assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser's opinions or conclusions. Comment: Uncertain information might include physical, legal, or economic characteristics of the subject property, or conditions external to the property, such as market conditions or trends, or about the integrity of data used in an analysis. (USPAP, 2024 ed.)
Fee Simple Interest Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.

Financial Feasibility The capability of a physically possible and legal use of property to produce a positive return after considering risk and all costs to create and maintain the use.

Go Dark 1. A term to describe when a tenant vacates space prior to a lease expiration.

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Gross Building Area (GBA) 1. Total floor area of a building, excluding unenclosed areas, measured from the exterior of the walls of the above grade area. This includes mezzanines and basements if and when typically included in the market area of the type of property involved. 2.

Gross leasable area plus all common areas. 3. For residential space, the total area of all floor levels measured from the exterior of the walls and including the superstructure and substructure basement; typically, does not include garage space.

Highest and Best Use The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value.

Hypothetical Condition 1. A condition that is presumed to be true when it is known to be false. 2. A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results but is used for the purpose of analysis. Comment: Hypothetical conditions are contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. (USPAP, 2024 ed.) Insurable Value A type of value for insurance purposes.

Leased Fee Interest The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires.

Leasehold Estate The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease.

Legal Permissibility One of the four criteria the highest and best use of a property must meet; a property use that is either currently allowed or most probably allowable under zoning codes, building codes, environmental regulations, and other applicable laws and regulations that govern land use.

Liquidation Value (also
known as Disposition
Value)
The most probable price that a specified interest in real property should bring under the following conditions: • Consummation of a sale within a short time period. • The property is subjected to market conditions prevailing as of the date of valuation. • Both the buyer and seller are acting prudently and knowledgeably. • The seller is under extreme compulsion to sell. • The buyer is typically motivated. • Both parties are acting in what they consider to be their best interests. • A normal marketing effort is not possible due to the brief exposure time. • Payment will be made in cash in US dollars or in terms of financial arrangements comparable thereto. • The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Marketing Time An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which precedes the effective date of an appraisal.

ATTACHMENT 3
Addenda
Bowery Valuation 2600045589 179
Market Rent The most probable rent that a property should bring in a competitive and open market under all conditions requisite to a fair lease transaction, the lessee and lessor each acting prudently and knowledgeably, and assuming the rent is not affected by undue stimulus. Implicit in this definition is the execution of a lease as of a specified date under conditions whereby: • Lessee and lessor are typically motivated. • Both parties are well informed or well advised, and acting in what they consider their best interests. • Payment is made in terms of cash or in terms of financial arrangements comparable thereto; and • The rent reflects specified terms and conditions typically found in that market, such as permitted uses, use restrictions, expense obligations, duration, concessions, rental adjustments and revaluations, renewal, and purchase options, frequency of payments (annual, monthly, etc.), and tenant improvements (TIs).

Market Value of the Going
Concern
The market value of an established and operating business including the real property, personal property, financial assets, and the intangible assets of the business.

Modified Gross Lease A lease in which the landlord receives stipulated rent and is obligated to pay some, but not all, of the property's operating and fixed expenses. Since assignment of expenses varies among modified gross leases, expense responsibility must always be specified.

In some markets, a modified gross lease may be called a double net lease, net net lease, partial net lease, or semi-gross lease.

Net Net Net Lease (NNN) An alternative term for a type of net lease. In some markets, a net net net lease is defined as a lease in which the tenant assumes all expenses (fixed and variable) of operating a property except that the landlord is responsible for structural maintenance, building reserves, and management; also called net net net lease, triple net lease, or fully net lease.

Net Operating Income
(NOI)
The anticipated net income remaining after all operating expenses are deducted from effective gross income.

Net Rentable Area (NRA) For office or retail buildings, the tenant's pro rata portion of the entire office floor, excluding elements of the building that penetrate through the floor to the areas below.

The rentable area of a floor is computed by measuring to the inside finished surface of the dominant portion of the permanent building walls, excluding any major vertical penetrations of the floor. Alternatively, the amount of space on which the rent is based; calculated according to local practice.

Physical Possibility One of the criteria that the highest and best use of a property must meet. For a land use to be considered physically possible, the parcel of land must be able to accommodate the construction of any building that would be a candidate for the ideal improvement.

Potential Gross Income
(PGI)
The total income attributable to property at full occupancy before vacancy and operating expenses are deducted.

Property Rights An enforceable, legal claim to title of or interest in property.

Prospective Market Value
"As Completed"
A prospective market value may be appropriate for the valuation of a property interest related to a credit decision for a proposed development or renovation project.

According to USPAP, an appraisal with a prospective market value reflects an effective date that is subsequent to the date of the appraisal report. Prospective value opinions are intended to reflect the current expectations and perceptions of market participants, based on available data. The prospective market value—as completed— reflects the property's market value as of the time that development is expected to be completed.

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Prospective Market Value
"As Stabilized"
A prospective market value may be appropriate for the valuation of a property interest related to a credit decision for a proposed development or renovation project.

According to USPAP, an appraisal with a prospective market value reflects an effective date that is subsequent to the date of the appraisal report. Prospective value opinions are intended to reflect the current expectations and perceptions of market participants, based on available data. The prospective market value—as stabilized— reflects the property's market value as of the time the property is projected to achieve stabilized occupancy. For an income-producing property, stabilized occupancy is the occupancy level that a property is expected to achieve after the property is exposed to the market for lease over a reasonable period of time and at comparable terms and conditions to other similar properties.

Prospective Opinion of
Value
A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long-term occupancy.

Replacement Cost for
Insurance Purposes
The estimated cost, at current prices as of the effective date of valuation, of a substitute for the building being valued, using modern materials and current standards, design, and layout for insurance coverage purposes guaranteeing that damaged property is replaced with new property (i.e., depreciation is not deducted).

Replacement Costs The estimated cost to construct, at current prices as of a specific date, a substitute for a building or other improvements, using modern materials and current standards, design, and layout.

Reproduction Costs The estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials, construction standards, design, layout, and quality of workmanship and embodying all the deficiencies, super-adequacies, and obsolescence of the subject building.

Retrospective Value
Opinion
A value opinion effective as of a specified historical date. The term retrospective does not define a type of value. Instead, it identifies a value opinion as being effective at some specific prior date. Value as of a historical date is frequently sought in connection with property tax appeals, damage models, lease renegotiation, deficiency judgments, estate tax, and condemnation. Inclusion of the type of value with this term is appropriate, e.g., "retrospective market value opinion".

Reversion A lump-sum benefit that an investor receives or expects to receive upon the termination of the investment.

Stabilized Income (1) An estimate of income, either current or forecasted, that presumes the property is at stabilized occupancy. (2) The forecast of the subject property's yearly average income (or average- equivalent income) expected for the economic life of the subject property. (3) Projected income that is subject to change but has been adjusted to reflect an equivalent, stable annual income.

Stabilized Occupancy (1) The occupancy of a property that would be expected at a particular point in time, considering its relative competitive strength and supply and demand conditions at the time, and presuming it is priced at market rent and has had reasonable market exposure. A property is at stabilized occupancy when it is capturing its appropriate share of market demand. (2) An expression of the average or typical occupancy that would be expected for a property over a specified projection period or over its economic life.

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Surplus Land Land that is not currently needed to support the existing use but cannot be separated from the property and sold off for another use. Surplus land does not have an independent highest and best use and may or may not contribute value to the improved parcel.

Tenant Improvements (TIs) 1. Fixed improvements to the land or structures installed for use by a lessee. 2. The original installation of finished tenant space in a construction project; subject to periodic change for succeeding tenants.

Yield Capitalization A method used to convert future benefits into present value by: (1) discounting each future benefit at an appropriate yield rate, or (2) developing an overall rate that explicitly reflects the investment's income pattern, holding period, value change, and yield rate.

ATTACHMENT 3
"Full" Capital Reserve Plan
Visitacion Gardens Apartments
Brisbane , CA
Report #:

For Period Beginning:

Expires:

Date Prepared:
58592-0
January 1, 2027
December 31, 2027
January 27, 2026
ATTACHMENT 4
T
W
Hello, and welcome to your Capital
Reserve Plan!
his Report is a valuable budget planning tool, for with it you control the future of your property. It contains all the fundamental information needed to understand your
current and future obligations, some of the most significant expenses that ownership will face.
ith respect to Reserves, this Report will tell you
"where you are," and "where to go from here."
In this Report, you will find...
1) A List of What you're Reserving For
2) An Evaluation of your Reserve Fund Size and
Strength
3) A Recommended Multi-Year Reserve Funding Plan
More Questions?
Visit our website at www.reservestudy.com or call us at:
415-694-8931
ATTACHMENT 4
Table of Contents
Executive Summary 4
Reserve Study Summary 4
Reserve Component List 5
Introduction, Objectives, and Methodology 6
Which Physical Assets are Funded by Capital Reserve Funds? 7 How do we establish Useful Life and Remaining Useful Life estimates? 7 How do we establish Current Repair/Replacement Cost Estimates? 7 How much money is enough? 8
How much should we transfer to Reserves? 9
What is our Recommended Funding Goal? 9
Site Inspection Notes 10
Projected Expenses 11
Annual Reserve Expense Graph 11
Reserve Fund Status & Recommended Funding Plan 12
Annual Reserve Funding Graph 12
30-Yr Cash Flow Graph 13
Percent Funded Graph 13
Table Descriptions 14
Budget Summary 15
Reserve Component List Detail 16
Fully Funded Balance 18
Component Significance 20
Accounting & Tax Summary 21
30-Year Reserve Plan Summary 23
30-Year Income/Expense Detail 24
Accuracy, Limitations, and Disclosures 30
Terms and Definitions 31
Component Details 32
Building Exteriors 33
Building Interiors, Common 42
Building Interiors, Units 46
Common Area 47
Mechanical & Systems 55 Association Reserves, #58592-0 3 of 58 1/27/2026 ATTACHMENT 4
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $542,383 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $542,383 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,700 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.00 % . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.00 % 3- Minute Executive Summary
Property: Visitacion Gardens Apartments  Property #: 58592-0 Location: Brisbane , CA # of Units: 1
Report Period: January 1, 2027 through December 31, 2027 Projected Starting Reserve Balance
Current Fully Funded Reserve Balance
Average Reserve Deficit (Surplus) Per Unit
Percent Funded
Recommended 2027 "Monthly Fully Funding Contributions"
Recommended 2027 Special Assessments for Reserves
2026 Monthly Contribution Rate
Reserves % Funded: 0.0%
Special Assessment Risk:
30% 70% 130%
High Medium Low
Economic Assumptions:

Net Annual "After Tax" Interest Earnings Accruing to Reserves Annual Inflation Rate
• This is a "Full" Capital Reserve Plan Reserve Study.
• The information in this Reserve Study is based on our site inspection on 1/12/2026. • This Reserve Study was prepared by a credentialed Reserve Specialist (RS). • Because your Reserve Fund is at 0.0 % Funded, this means the association’s special assessment & deferred maintenance risk is currently High. • Your multi-year Funding Plan is designed to gradually bring you to the 100% level, or "Full Funded".
• Based on this starting point, your anticipated future expenses, and your historical Reserve allocation rate, we recommend setting your Reserve allocations to $6,700 Monthly.
• The Deterioration rate for your Reserve Components is $4,812.50 Monthly. • No assets appropriate for Reserve designation were excluded. • We recommend that this Reserve Study be updated annually, with an on-site inspection update every three years.

Association Reserves, #58592-0 4 of 58 1/27/2026
ATTACHMENT 4
Executive Summary 58592-0
# Component Useful Life (yrs) Rem. Useful
Life (yrs)
Current Average
Cost
Building Exteriors
104 Balcony Surfaces - Resurface 40 13 $1,280
117 Walkway Decks - Resurface 40 13 $10,800
117 Walkway Decks - Seal/Repair 5 3 $1,800
118 Balcony Railing - Replace 40 13 $9,600
324 Exterior Lights - Replace 20 15 $8,400
508 Exterior Railing - Repair/Replace 40 13 $12,000
703 Utility Doors - Replace 35 8 $3,000
1115 Building Exterior - Repaint 10 5 $79,500
1117 Exterior Surfaces - Repair 10 5 $19,875
1137 Windows - Replace 40 13 $189,000
1303 Comp Shingle Roofs - Replace 30 3 $112,500
1308 Flat Roof - Replace 20 3 $40,000
1309 Metal Roof - Replace 40 13 $12,500
1312 Gutters/Downspouts - Partial Replace 5 0 $17,000
Building Interiors, Common
325 Interior Lights - Replace 25 5 $3,000
909 Bathroom - Refurbish 20 5 $5,000
911 Kitchen Appliances - Replace 10 5 $2,400
912 Kitchen - Remodel 20 5 $10,500
918 Office - Remodel 20 5 $3,500
1110 Community Room - Repaint 10 5 $9,600
Building Interiors, Units
915 Unit - Remodel 1 0 $18,500
Common Area
202 Asphalt - Repave 30 25 $20,500
203 Asphalt - Seal/Repair/Stripe 5 4 $2,563
320 Pole Lights - Replace 30 15 $12,000
322 Bollard Lights - Replace 20 5 $7,200
403 Mailboxes - Replace 25 1 $4,200
404 Outdoor Furniture - Replace 10 5 $2,000
503 Metal Fence/Gate - Replace 40 13 $9,500
505 Wood Fence - Repair/Replace 25 1 $18,500
509 Decorative Arbor - Replace 25 3 $3,000
514 Wood Retaining Wall - Replace/Repair 35 8 $16,500
750 Pedestrian Gates - Replace 40 13 $16,500
Mechanical & Systems
704 Intercom - Replace 12 5 $19,500
803 Water Heaters - Replace 12 6 $27,000
1001 Fire Backflow Preventer - Replace 30 3 $15,000
1811 Plumbing - Inspect/Repair 5 0 $7,000
1819 Fire Alarm System - Replace 20 0 $12,000
1844 Electrical System - Inspect/Repair 15 0 $7,000
38 Total Funded Components
Note 1: Yellow highlighted line items are expected to require attention in this initial year.

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ATTACHMENT 4
Introduction
A Capital Reserve Plan is the art and science of anticipating, and preparing for, a property's major predictable repair and replacement expenses. Partially art, because in this field we are making projections about the future. Partially science, because our work is a combination of research and welldefined computations, following consistent National Reserve Study Standard principles.

The foundation of this and every Capital Reserve Plan
is your Component List (what you are reserving for).

This is because the Component List defines the scope
and schedule of all your anticipated upcoming major,
predictable capital projects. Based on that List and
your starting balance, we calculate the property
Capital Reserve Fund Strength (reported in terms of
"Percent Funded"). Then we compute a Funding Plan
to provide for the needs of the property. These form
the three results of your Capital Reserve Plan.

Capital Reserve transfers are not “for the future”. Capital Reserve transfers are designed to offset the ongoing, daily deterioration of your Capital Reserve assets. Done well, a stable, budgeted Capital Reserve Funding Plan will collect sufficient funds from the owners who enjoyed the use of those assets, so the property is financially prepared for the irregular expenditures scattered through future years when those projects eventually require replacement.

Methodology
For this Capital Reserve Plan, we started with a
review of ownership boundaries, as detailed by
property, recent Capital expenditures, an
evaluation of how expenditures are handled
(ongoing maintenance vs Capital), and research
into any well-established historical precedents.

We performed an on-site inspection to quantify and evaluate your major predictable, creating your Reserve Component List from scratch.

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ATTACHMENT 4
Which Physical Assets are Funded by Reserves?
There is a national-standard three-part test to
determine which projects should appear in a
Reserve Component List. First, it must be a
common area maintenance obligation. Second,
both the need and schedule of a component’s
project can be reasonably anticipated. Third, the
project’s total cost is material to the client, can
be reasonably anticipated, and includes all
direct and related costs. A project cost is
commonly considered material if it is more than

0.5% to 1% of the total annual budget. This
limits Reserve components to major, predictable
expenses. Within this framework, it is
inappropriate to include lifetime components,
unpredictable expenses (such as damage due to natural disasters and/or insurable events), and expenses more appropriately handled from the Operational budget.

How do we establish Useful Life and Remaining Useful Life estimates? 1)  Visual Inspection (observed wear and age)
2)  Association Reserves Database and Experience
3)  Property History (install dates & previous life cycle information) 4)  Vendor Evaluation and Recommendation
How do we establish Current Repair/Replacement Cost Estimates? In this order...
1)  Actual property cost history, or current proposals
2)  Comparison to Association Reserves Database of Work Completed at Similar Properties
3)  Vendor Recommendations
4)  Reliable National Industry cost estimating guidebooks Association Reserves, #58592-0 7 of 58 1/27/2026
ATTACHMENT 4
How much Reserves are enough?
Capital Reserve Fund adequacy is not measured in cash terms. Capital Reserve Fund adequacy is found when the amount of current Capital cash is compared to Capital Reserve asset component deterioration (the needs of the property). Having enough means the property can execute its projects in a timely manner with existing Capital Reserve funds. Not having enough typically creates deferred maintenance or special funding needs.

Adequacy is measured in a two-step process:
1)  Calculate the value of deterioration at the
property (called Fully Funded Balance, or
FFB).
2)  Compare that to the Capital Reserve Fund
Balance, and express as a percentage.

Each year, the value of deterioration at the
property changes. When there is more
deterioration (as components approach the time they need to be replaced), there should be more cash to offset that deterioration and prepare for the expenditure. Conversely, the value of deterioration shrinks after projects are accomplished. The value of deterioration (the FFB) changes each year, and is a moving but predictable target.

There is a high risk of special funding needs and deferred maintenance when the Percent Funded is weak, below 30%. Approximately 30% of all properties are in this high risk range. While the 100% point is Ideal (indicating Reserve cash is equal to the value of deterioration), a Reserve Fund in the 70% - 130% range is considered strong (low risk of special funding needs).

Measuring your Capital Reserve Funds by Percent Funded tells how well prepared your property is for upcoming Reserve expenses. Those charged with maintaining the physical property should be very aware of this important figure!
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ATTACHMENT 4
How much should we transfer to Reserves?
According to National Reserve Study Standards, there
are four Funding Principles to balance in developing
your Reserve Funding Plan. Our first objective is to
design a plan that provides you with sufficient cash to perform your Reserve projects on time. Second, a stable rate of ongoing Reserve transfers is desirable because it keeps these naturally irregular expenses from unsettling the budget.

Reserve transfers that are evenly distributed over current and future owners enable each owner to pay their fair share of the property's Reserve expenses over the years. And finally, we develop a plan that is fiscally responsible and safe for Board members to recommend to their property. Remember, it is the Board's job to provide for the ongoing care of the real property that supports your entity mission.

What is our Recommended Funding Goal?
Maintaining the Reserve Fund at a level equal to the
value of deterioration is called "Full Funding" (100%
Funded). As each asset ages and becomes "used up,"
the Reserve Fund grows proportionally. This is simple,
responsible, and our recommendation. Evidence
shows that properties in the 70 - 130% range enjoy a low risk of special funding needs or deferred maintenance.

Allowing the Reserves to fall close to zero, but not below zero, is called Baseline Funding. Doing so allows the Reserve Fund to drop into the 0 - 30% range, where there is a high risk of special funding needs & deferred maintenance. Since Baseline Funding still provides for the timely execution of all Reserve projects, and only the "margin of safety" is different, recommended Reserve transfers for Baseline Funding average only 10% to 15% less than Full Funding recommendations. Threshold Funding is the title of all other Cash or Percent Funded objectives between Baseline Funding and Full Funding.

Association Reserves, #58592-0 9 of 58 1/27/2026
ATTACHMENT 4
Site Inspection Notes
During our site visit on 1/12/2026, we visually inspected the property and were able to see most areas. Please see the Photographic Inventory Appendix at the end of this report for a detailed look at each component.

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ATTACHMENT 4
Projected Expenses
While this Reserve Study looks forward 30 years, we have no expectation that all these expenses will all take place as anticipated. This Reserve Study needs to be updated annually because we expect the timing of these expenses to shift and the size of these expenses to change. We do feel more certain of the timing and cost of near-term expenses than expenses many years away. Please be aware of your near-term expenses, which we are able to project more accurately than the more distant projections.

The figure below summarizes the projected future expenses at your property as defined by your Reserve Component List. A summary of these components is shown in the Component Details table, while a summary of the expenses themselves are shown in the 30-yr Expense Summary table.

Figure 1
Association Reserves, #58592-0 11 of 58 1/27/2026
ATTACHMENT 4
Reserve Fund Status
The starting point for our financial analysis is your Reserve Fund balance, projected to be $0 as-of the start of your fiscal year. This is based on your actual balance on 12/31/2025 of $0 and anticipated Reserve transfers and expenses projected through the end of your Fiscal Year. As of 1/1/2027, your Fully Funded Balance is computed to be $542,383. (see Acct/Tax Summary table). This figure represents the deteriorated value of your common area components. Comparing your Reserve Balance to your Fully Funded Balance indicates you are 0.0 % Funded.

Recommended Funding Plan
Based on your current Percent Funded and your near-term and long-term Reserve needs, we are recommending budgeted transfers of $6,700/Monthly this Fiscal Year. The overall 30-yr plan, in perspective, is shown below. This same information is shown numerically in both the 30-yr Summary and the Cash Flow Detail tables.

Figure 2
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ATTACHMENT 4
The following chart shows your Reserve balance under our recommended Full Funding Plan and at your current budgeted transfer rate, compared to your always-changing Fully Funded Balance target.

Figure 3
This figure shows the same information plotted on a Percent Funded scale. It is clear here to see how your Reserve Fund strength approaches the 100% Funded level under our recommended multi-yr Funding Plan.

Figure 4
Association Reserves, #58592-0 13 of 58 1/27/2026
ATTACHMENT 4
Table Descriptions
Executive Summary is a summary of your Reserve Components Budget Summary is a management and accounting tool, summarizing groupings of your Reserve Components.

Reserve Component List Detail discloses key Component information, providing the foundation upon which the financial analysis is performed.

Fully Funded Balance shows the calculation of the Fully Funded Balance for each of your components, and their specific proportion related to the property total. For each component, the Fully Funded Balance is the fraction of life used up multiplied by its estimated Current Replacement Cost.

Component Significance shows the relative significance of each component to Reserve funding needs of the property, helping you see which components have more (or less) influence than others on your total Reserve funding requirements. The deterioration cost/yr of each component is calculated by dividing the estimated Current Replacement Cost by its Useful Life, then that component’s percentage of the total is displayed.

Accounting & Tax Summary provides information on each Component's proportion of key totals. If shown, the Current Fund Balance is a redistribution of the current Reserve total to near-term (low RUL) projects first.

Any Reserve transfer shown is a portion of the total current transfer rate, assigned proportionally on the basis of that component's deterioration cost/yr. As this is a Cash Flow analysis in which no funds are assigned or restricted to particular components, all values shown are only representative and have no merit outside of tax preparation purposes. They are not useful for Reserve funding calculations.
30-Yr Reserve Plan Summary provides a one-page 30-year summary of the cash flowing into and out of the Reserve Fund, with a display of the Fully Funded Balance, Percent Funded, and special assessment risk at the beginning of each year.
30-Year Income/Expense Detail shows the detailed income and expenses for each of the next 30 years. This table makes it possible to see which components are projected to require repair or replacement in a particular year, and the size of those individual expenses.

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ATTACHMENT 4
58592-0
Full
Max Max
40 15 $517,255 $17,000 $0 $365,818 $517,255 $35,965
25 5 $34,000 $0 $0 $22,650 $34,000 $3,160
1 0 $18,500 $18,500 $0 $18,500 $18,500 $25,756
40 25 $112,463 $0 $0 $71,040 $112,463 $5,994
30 6 $87,500 $26,000 $0 $64,375 $87,500 $9,525
$769,718 61,500 0 542,383 769,718 80,400

0.0%
Budget Summary
Useful Life
2027 Rem. Useful
Life
Estimated
Replacement
Cost in 2027
2027
Expenditures
01/01/2027
Current Fund
Balance
01/01/2027
Fully Funded
Balance
Remaining
Bal. to be
Funded 2027 Funding
Min Min
Building
Exteriors 5 0
Building
Interiors,
Common
10 5
Building
Interiors, Units 1 0
Common Area 5 1
Mechanical &
Systems 5 0
$ $ $ $ $
Percent Funded:

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ATTACHMENT 4
Report # 58592-0
Full Capital Reserve Plan

Reserve Component List Detail
# Component Approx Quantity Useful Life Rem.

Useful Life
Current
Cost
Estimate
Building Exteriors
104 Balcony Surfaces - Resurface 32 GSF 40 13 $1,280
117 Walkway Decks - Resurface 360 GSF 40 13 $10,800
117 Walkway Decks - Seal/Repair 360 GSF 5 3 $1,800
118 Balcony Railing - Replace 80 LF 40 13 $9,600
324 Exterior Lights - Replace 28 Fixtures 20 15 $8,400
508 Exterior Railing - Repair/Replace 80 LF 40 13 $12,000 703 Utility Doors - Replace 2 Doors 35 8 $3,000
1115 Building Exterior - Repaint 15,900 GSF 10 5 $79,500 1117 Exterior Surfaces - Repair 15,900 GSF 10 5 $19,875 1137 Windows - Replace 126 Windows 40 13 $189,000
1303 Comp Shingle Roofs - Replace 7,500 GSF 30 3 $112,500 1308 Flat Roof - Replace 2,000 GSF 20 3 $40,000
1309 Metal Roof - Replace 500 GSF 40 13 $12,500
1312 Gutters/Downspouts - Partial Replace 850 LF x20% 5 0 $17,000 Building Interiors, Common
325 Interior Lights - Replace 10 Fixtures 25 5 $3,000
909 Bathroom - Refurbish 1 Bathroom 20 5 $5,000
911 Kitchen Appliances - Replace 2 Appliances 10 5 $2,400 912 Kitchen - Remodel 1 Kitchen 20 5 $10,500
918 Office - Remodel 1 Office 20 5 $3,500
1110 Community Room - Repaint 3,200 GSF 10 5 $9,600
Building Interiors, Units
915 Unit - Remodel 1 Unit 1 0 $18,500
Common Area
202 Asphalt - Repave 2,050 GSF 30 25 $20,500
203 Asphalt - Seal/Repair/Stripe 2,050 GSF 5 4 $2,563
320 Pole Lights - Replace 4 Pole Lights 30 15 $12,000
322 Bollard Lights - Replace 6 Bollards 20 5 $7,200
403 Mailboxes - Replace 14 Boxes 25 1 $4,200
404 Outdoor Furniture - Replace 4 Pieces 10 5 $2,000
503 Metal Fence/Gate - Replace 95 LF 40 13 $9,500
505 Wood Fence - Repair/Replace 185 LF 25 1 $18,500
509 Decorative Arbor - Replace 1 Structure 25 3 $3,000
514 Wood Retaining Wall - Replace/Repair 110 LF 35 8 $16,500 750 Pedestrian Gates - Replace 3 Gates 40 13 $16,500
Mechanical & Systems
704 Intercom - Replace 3 Intercom 12 5 $19,500
803 Water Heaters - Replace 3 Water Heaters 12 6 $27,000 1001 Fire Backflow Preventer - Replace 1 Device 30 3 $15,000 1811 Plumbing - Inspect/Repair 1 Allowance 5 0 $7,000
1819 Fire Alarm System - Replace 1 System 20 0 $12,000
1844 Electrical System - Inspect/Repair 1 Allowance 15 0 $7,000 Association Reserves, #58592-0 16 of 58 1/27/2026
ATTACHMENT 4
38 Total Funded Components
Association Reserves, #58592-0 17 of 58 1/27/2026
ATTACHMENT 4
58592-0
Full
Fully Funded Balance
Current Fully
Cost Effective Useful Funded
# Component Estimate X Age / Life = Balance
Building Exteriors
104 Balcony Surfaces - Resurface $1,280 X 27 / 40 = $864 117 Walkway Decks - Resurface $10,800 X 27 / 40 = $7,290 117 Walkway Decks - Seal/Repair $1,800 X 2 / 5 = $720
118 Balcony Railing - Replace $9,600 X 27 / 40 = $6,480 324 Exterior Lights - Replace $8,400 X 5 / 20 = $2,100
508 Exterior Railing - Repair/Replace $12,000 X 27 / 40 = $8,100 703 Utility Doors - Replace $3,000 X 27 / 35 = $2,314
1115 Building Exterior - Repaint $79,500 X 5 / 10 = $39,750 1117 Exterior Surfaces - Repair $19,875 X 5 / 10 = $9,938 1137 Windows - Replace $189,000 X 27 / 40 = $127,575
1303 Comp Shingle Roofs - Replace $112,500 X 27 / 30 = $101,250 1308 Flat Roof - Replace $40,000 X 17 / 20 = $34,000
1309 Metal Roof - Replace $12,500 X 27 / 40 = $8,438
1312 Gutters/Downspouts - Partial Replace $17,000 X 5 / 5 = $17,000 Building Interiors, Common
325 Interior Lights - Replace $3,000 X 20 / 25 = $2,400 909 Bathroom - Refurbish $5,000 X 15 / 20 = $3,750
911 Kitchen Appliances - Replace $2,400 X 5 / 10 = $1,200 912 Kitchen - Remodel $10,500 X 15 / 20 = $7,875
918 Office - Remodel $3,500 X 15 / 20 = $2,625
1110 Community Room - Repaint $9,600 X 5 / 10 = $4,800
Building Interiors, Units
915 Unit - Remodel $18,500 X 1 / 1 = $18,500
Common Area
202 Asphalt - Repave $20,500 X 5 / 30 = $3,417
203 Asphalt - Seal/Repair/Stripe $2,563 X 1 / 5 = $513
320 Pole Lights - Replace $12,000 X 15 / 30 = $6,000
322 Bollard Lights - Replace $7,200 X 15 / 20 = $5,400
403 Mailboxes - Replace $4,200 X 24 / 25 = $4,032
404 Outdoor Furniture - Replace $2,000 X 5 / 10 = $1,000 503 Metal Fence/Gate - Replace $9,500 X 27 / 40 = $6,413 505 Wood Fence - Repair/Replace $18,500 X 24 / 25 = $17,760 509 Decorative Arbor - Replace $3,000 X 22 / 25 = $2,640 514 Wood Retaining Wall - Replace/Repair $16,500 X 27 / 35 = $12,729 750 Pedestrian Gates - Replace $16,500 X 27 / 40 = $11,138 Mechanical & Systems
704 Intercom - Replace $19,500 X 7 / 12 = $11,375
803 Water Heaters - Replace $27,000 X 6 / 12 = $13,500
1001 Fire Backflow Preventer - Replace $15,000 X 27 / 30 = $13,500 1811 Plumbing - Inspect/Repair $7,000 X 5 / 5 = $7,000
1819 Fire Alarm System - Replace $12,000 X 20 / 20 = $12,000 1844 Electrical System - Inspect/Repair $7,000 X 15 / 15 = $7,000 Association Reserves, #58592-0 18 of 58 1/27/2026
ATTACHMENT 4
$542,383
Association Reserves, #58592-0 19 of 58 1/27/2026
ATTACHMENT 4
58592-0
Full
Component Significance
Current Cost Deterioration Deterioration
# Component Useful Life (yrs) Estimate Cost/Yr Significance Building Exteriors
104 Balcony Surfaces - Resurface 40 $1,280 $32 0.06 %
117 Walkway Decks - Resurface 40 $10,800 $270 0.47 %
117 Walkway Decks - Seal/Repair 5 $1,800 $360 0.62 %
118 Balcony Railing - Replace 40 $9,600 $240 0.42 %
324 Exterior Lights - Replace 20 $8,400 $420 0.73 %
508 Exterior Railing - Repair/Replace 40 $12,000 $300 0.52 % 703 Utility Doors - Replace 35 $3,000 $86 0.15 %
1115 Building Exterior - Repaint 10 $79,500 $7,950 13.77 % 1117 Exterior Surfaces - Repair 10 $19,875 $1,988 3.44 % 1137 Windows - Replace 40 $189,000 $4,725 8.18 %
1303 Comp Shingle Roofs - Replace 30 $112,500 $3,750 6.49 % 1308 Flat Roof - Replace 20 $40,000 $2,000 3.46 %
1309 Metal Roof - Replace 40 $12,500 $313 0.54 %
1312 Gutters/Downspouts - Partial Replace 5 $17,000 $3,400 5.89 % Building Interiors, Common
325 Interior Lights - Replace 25 $3,000 $120 0.21 %
909 Bathroom - Refurbish 20 $5,000 $250 0.43 %
911 Kitchen Appliances - Replace 10 $2,400 $240 0.42 %
912 Kitchen - Remodel 20 $10,500 $525 0.91 %
918 Office - Remodel 20 $3,500 $175 0.30 %
1110 Community Room - Repaint 10 $9,600 $960 1.66 %
Building Interiors, Units
915 Unit - Remodel 1 $18,500 $18,500 32.03 %
Common Area
202 Asphalt - Repave 30 $20,500 $683 1.18 %
203 Asphalt - Seal/Repair/Stripe 5 $2,563 $513 0.89 %
320 Pole Lights - Replace 30 $12,000 $400 0.69 %
322 Bollard Lights - Replace 20 $7,200 $360 0.62 %
403 Mailboxes - Replace 25 $4,200 $168 0.29 %
404 Outdoor Furniture - Replace 10 $2,000 $200 0.35 %
503 Metal Fence/Gate - Replace 40 $9,500 $238 0.41 %
505 Wood Fence - Repair/Replace 25 $18,500 $740 1.28 %
509 Decorative Arbor - Replace 25 $3,000 $120 0.21 %
514 Wood Retaining Wall - Replace/Repair 35 $16,500 $471 0.82 % 750 Pedestrian Gates - Replace 40 $16,500 $413 0.71 %
Mechanical & Systems
704 Intercom - Replace 12 $19,500 $1,625 2.81 %
803 Water Heaters - Replace 12 $27,000 $2,250 3.90 %
1001 Fire Backflow Preventer - Replace 30 $15,000 $500 0.87 % 1811 Plumbing - Inspect/Repair 5 $7,000 $1,400 2.42 %
1819 Fire Alarm System - Replace 20 $12,000 $600 1.04 % 1844 Electrical System - Inspect/Repair 15 $7,000 $467 0.81 % 38 Total Funded Components $57,750 100.00 %
Association Reserves, #58592-0 20 of 58 1/27/2026
ATTACHMENT 4
58592-0
Full
# UL RUL
Current Cost
Estimate
Fully Funded
Balance
Projected
Reserve
Balance
Proportional
Reserve
Funding
104 40 13 $1,280 $864 $0 $4
117 40 13 $10,800 $7,290 $0 $31
117 5 3 $1,800 $720 $0 $42
118 40 13 $9,600 $6,480 $0 $28
324 20 15 $8,400 $2,100 $0 $49
508 40 13 $12,000 $8,100 $0 $35
703 35 8 $3,000 $2,314 $0 $10
1115 10 5 $79,500 $39,750 $0 $922
1117 10 5 $19,875 $9,938 $0 $231
1137 40 13 $189,000 $127,575 $0 $548
1303 30 3 $112,500 $101,250 $0 $435
1308 20 3 $40,000 $34,000 $0 $232
1309 40 13 $12,500 $8,438 $0 $36
1312 5 0 $17,000 $17,000 $0 $394
325 25 5 $3,000 $2,400 $0 $14
909 20 5 $5,000 $3,750 $0 $29
911 10 5 $2,400 $1,200 $0 $28
912 20 5 $10,500 $7,875 $0 $61
918 20 5 $3,500 $2,625 $0 $20
1110 10 5 $9,600 $4,800 $0 $111
915 1 0 $18,500 $18,500 $0 $2,146
202 30 25 $20,500 $3,417 $0 $79
203 5 4 $2,563 $513 $0 $59
320 30 15 $12,000 $6,000 $0 $46
322 20 5 $7,200 $5,400 $0 $42
403 25 1 $4,200 $4,032 $0 $19
404 10 5 $2,000 $1,000 $0 $23
503 40 13 $9,500 $6,413 $0 $28
505 25 1 $18,500 $17,760 $0 $86
509 25 3 $3,000 $2,640 $0 $14
514 35 8 $16,500 $12,729 $0 $55
750 40 13 $16,500 $11,138 $0 $48
704 12 5 $19,500 $11,375 $0 $189
Accounting & Tax Summary
Component
Building Exteriors
Balcony Surfaces - Resurface
Walkway Decks - Resurface
Walkway Decks - Seal/Repair
Balcony Railing - Replace
Exterior Lights - Replace
Exterior Railing - Repair/Replace
Utility Doors - Replace
Building Exterior - Repaint
Exterior Surfaces - Repair
Windows - Replace
Comp Shingle Roofs - Replace
Flat Roof - Replace
Metal Roof - Replace
Gutters/Downspouts - Partial Replace
Building Interiors, Common
Interior Lights - Replace
Bathroom - Refurbish
Kitchen Appliances - Replace
Kitchen - Remodel
Office - Remodel
Community Room - Repaint
Building Interiors, Units
Unit - Remodel
Common Area
Asphalt - Repave
Asphalt - Seal/Repair/Stripe
Pole Lights - Replace
Bollard Lights - Replace
Mailboxes - Replace
Outdoor Furniture - Replace
Metal Fence/Gate - Replace
Wood Fence - Repair/Replace
Decorative Arbor - Replace
Wood Retaining Wall - Replace/Repair
Pedestrian Gates - Replace
Mechanical & Systems
Intercom - Replace
Association Reserves, #58592-0 21 of 58 1/27/2026
ATTACHMENT 4
803 12 6 $27,000 $13,500 $0 $261
1001 30 3 $15,000 $13,500 $0 $58
1811 5 0 $7,000 $7,000 $0 $162
1819 20 0 $12,000 $12,000 $0 $70
1844 15 0 $7,000 $7,000 $0 $54
38 $542,383 $0 $6,700
Water Heaters - Replace
Fire Backflow Preventer - Replace
Plumbing - Inspect/Repair
Fire Alarm System - Replace
Electrical System - Inspect/Repair
Total Funded Components
Association Reserves, #58592-0 22 of 58 1/27/2026
ATTACHMENT 4
58592-0
Full

2.00 % 4.00 %
30-Year Reserve Plan Summary
Fiscal Year Start: 2027 Net After Tax Interest: Avg 30-Yr Inflation:

Reserve Fund Strength (as-of Fiscal Year Start) Projected Reserve Balance Changes % Increase
Starting Fully Special In Annual Loan or
Reserve Funded Percent Funding
Needs Reserve Reserve Special Interest Reserve
Year Balance Balance Funded Risk Funding Funding Funding Needs Income Expenses
2027 $0 $542,383 0.0 % High 0.00 % $80,400 $100,000 $1,200 $61,500 2028 $120,100 $560,178 21.4 % High 5.00 % $84,420 $0 $2,844 $42,848 2029 $164,516 $600,486 27.4 % High 5.00 % $88,641 $0 $4,013 $20,010 2030 $237,160 $668,656 35.5 % Medium 5.00 % $93,073 $0 $3,560 $214,624 2031 $119,170 $539,752 22.1 % High 5.00 % $97,727 $0 $3,143 $24,641 2032 $195,398 $605,977 32.2 % Medium 5.00 % $102,613 $0 $2,468 $248,897 2033 $51,582 $444,435 11.6 % High 5.00 % $107,744 $0 $1,547 $57,572 2034 $103,302 $478,332 21.6 % High 5.00 % $113,131 $0 $2,981 $24,345 2035 $195,069 $551,182 35.4 % Medium 5.00 % $118,787 $0 $4,586 $54,469 2036 $263,974 $598,777 44.1 % Medium 5.00 % $124,727 $0 $6,284 $29,979 2037 $365,006 $677,033 53.9 % Medium 2.50 % $127,845 $0 $8,023 $62,910 2038 $437,963 $727,591 60.2 % Medium 2.50 % $131,041 $0 $9,875 $28,480 2039 $550,399 $819,535 67.2 % Medium 2.50 % $134,317 $0 $12,166 $29,619 2040 $667,263 $917,670 72.7 % Low 2.50 % $137,675 $0 $10,128 $468,685 2041 $346,381 $566,948 61.1 % Medium 2.50 % $141,117 $0 $8,048 $36,474 2042 $459,071 $655,697 70.0 % Low 2.50 % $144,645 $0 $7,395 $330,068 2043 $281,043 $446,818 62.9 % Medium 2.50 % $148,261 $0 $6,819 $34,650 2044 $401,473 $541,146 74.2 % Low 2.50 % $151,967 $0 $8,890 $74,020 2045 $488,310 $602,801 81.0 % Low 2.50 % $155,767 $0 $10,461 $95,821 2046 $558,717 $648,929 86.1 % Low 2.50 % $159,661 $0 $12,441 $44,377 2047 $686,442 $755,271 90.9 % Low 2.50 % $163,652 $0 $14,302 $119,416 2048 $744,980 $792,888 94.0 % Low 2.50 % $167,744 $0 $16,304 $42,157 2049 $886,871 $917,622 96.6 % Low 2.50 % $171,937 $0 $19,194 $43,843 2050 $1,034,158 $1,051,066 98.4 % Low 2.50 % $176,236 $0 $21,152 $148,622 2051 $1,082,924 $1,086,572 99.7 % Low 2.50 % $180,642 $0 $23,136 $53,991 2052 $1,232,711 $1,227,835 100.4 % Low 2.50 % $185,158 $0 $21,300 $540,032 2053 $899,137 $875,425 102.7 % Low 2.50 % $189,787 $0 $18,911 $114,226 2054 $993,609 $958,161 103.7 % Low 2.50 % $194,531 $0 $21,480 $53,342 2055 $1,156,278 $1,114,186 103.8 % Low 2.50 % $199,395 $0 $24,646 $69,870 2056 $1,310,449 $1,266,190 103.5 % Low 2.50 % $204,379 $0 $27,237 $126,502 Association Reserves, #58592-0 23 of 58 1/27/2026
ATTACHMENT 4
58592-0
Full
30-Year Income/Expense Detail (yrs 0 through 4)
Fiscal Year 2027 2028 2029 2030 2031
Starting Reserve Balance $0 $120,100 $164,516 $237,160 $119,170 Annual Reserve Funding $80,400 $84,420 $88,641 $93,073 $97,727 Recommended Special Assessments $100,000 $0 $0 $0 $0
Interest Earnings $1,200 $2,844 $4,013 $3,560 $3,143
Total Income $181,600 $207,364 $257,170 $333,794 $220,039 # Component
Building Exteriors
104 Balcony Surfaces - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Seal/Repair $0 $0 $0 $2,025 $0
118 Balcony Railing - Replace $0 $0 $0 $0 $0
324 Exterior Lights - Replace $0 $0 $0 $0 $0
508 Exterior Railing - Repair/Replace $0 $0 $0 $0 $0
703 Utility Doors - Replace $0 $0 $0 $0 $0
1115 Building Exterior - Repaint $0 $0 $0 $0 $0
1117 Exterior Surfaces - Repair $0 $0 $0 $0 $0
1137 Windows - Replace $0 $0 $0 $0 $0
1303 Comp Shingle Roofs - Replace $0 $0 $0 $126,547 $0
1308 Flat Roof - Replace $0 $0 $0 $44,995 $0
1309 Metal Roof - Replace $0 $0 $0 $0 $0
1312 Gutters/Downspouts - Partial Replace $17,000 $0 $0 $0 $0 Building Interiors, Common
325 Interior Lights - Replace $0 $0 $0 $0 $0
909 Bathroom - Refurbish $0 $0 $0 $0 $0
911 Kitchen Appliances - Replace $0 $0 $0 $0 $0
912 Kitchen - Remodel $0 $0 $0 $0 $0
918 Office - Remodel $0 $0 $0 $0 $0
1110 Community Room - Repaint $0 $0 $0 $0 $0
Building Interiors, Units
915 Unit - Remodel $18,500 $19,240 $20,010 $20,810 $21,642 Common Area
202 Asphalt - Repave $0 $0 $0 $0 $0
203 Asphalt - Seal/Repair/Stripe $0 $0 $0 $0 $2,998
320 Pole Lights - Replace $0 $0 $0 $0 $0
322 Bollard Lights - Replace $0 $0 $0 $0 $0
403 Mailboxes - Replace $0 $4,368 $0 $0 $0
404 Outdoor Furniture - Replace $0 $0 $0 $0 $0
503 Metal Fence/Gate - Replace $0 $0 $0 $0 $0
505 Wood Fence - Repair/Replace $0 $19,240 $0 $0 $0
509 Decorative Arbor - Replace $0 $0 $0 $3,375 $0
514 Wood Retaining Wall - Replace/Repair $0 $0 $0 $0 $0 750 Pedestrian Gates - Replace $0 $0 $0 $0 $0
Mechanical & Systems
704 Intercom - Replace $0 $0 $0 $0 $0
803 Water Heaters - Replace $0 $0 $0 $0 $0
1001 Fire Backflow Preventer - Replace $0 $0 $0 $16,873 $0 1811 Plumbing - Inspect/Repair $7,000 $0 $0 $0 $0
1819 Fire Alarm System - Replace $12,000 $0 $0 $0 $0
1844 Electrical System - Inspect/Repair $7,000 $0 $0 $0 $0 Total Expenses $61,500 $42,848 $20,010 $214,624 $24,641 Ending Reserve Balance $120,100 $164,516 $237,160 $119,170 $195,398 Association Reserves, #58592-0 24 of 58 1/27/2026
ATTACHMENT 4
Fiscal Year 2032 2033 2034 2035 2036
Starting Reserve Balance $195,398 $51,582 $103,302 $195,069 $263,974 Annual Reserve Funding $102,613 $107,744 $113,131 $118,787 $124,727 Recommended Special Assessments $0 $0 $0 $0 $0
Interest Earnings $2,468 $1,547 $2,981 $4,586 $6,284
Total Income $300,479 $160,874 $219,414 $318,443 $394,985 # Component
Building Exteriors
104 Balcony Surfaces - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Seal/Repair $0 $0 $0 $2,463 $0
118 Balcony Railing - Replace $0 $0 $0 $0 $0
324 Exterior Lights - Replace $0 $0 $0 $0 $0
508 Exterior Railing - Repair/Replace $0 $0 $0 $0 $0
703 Utility Doors - Replace $0 $0 $0 $4,106 $0
1115 Building Exterior - Repaint $96,724 $0 $0 $0 $0
1117 Exterior Surfaces - Repair $24,181 $0 $0 $0 $0
1137 Windows - Replace $0 $0 $0 $0 $0
1303 Comp Shingle Roofs - Replace $0 $0 $0 $0 $0
1308 Flat Roof - Replace $0 $0 $0 $0 $0
1309 Metal Roof - Replace $0 $0 $0 $0 $0
1312 Gutters/Downspouts - Partial Replace $20,683 $0 $0 $0 $0 Building Interiors, Common
325 Interior Lights - Replace $3,650 $0 $0 $0 $0
909 Bathroom - Refurbish $6,083 $0 $0 $0 $0
911 Kitchen Appliances - Replace $2,920 $0 $0 $0 $0
912 Kitchen - Remodel $12,775 $0 $0 $0 $0
918 Office - Remodel $4,258 $0 $0 $0 $0
1110 Community Room - Repaint $11,680 $0 $0 $0 $0
Building Interiors, Units
915 Unit - Remodel $22,508 $23,408 $24,345 $25,319 $26,331 Common Area
202 Asphalt - Repave $0 $0 $0 $0 $0
203 Asphalt - Seal/Repair/Stripe $0 $0 $0 $0 $3,648
320 Pole Lights - Replace $0 $0 $0 $0 $0
322 Bollard Lights - Replace $8,760 $0 $0 $0 $0
403 Mailboxes - Replace $0 $0 $0 $0 $0
404 Outdoor Furniture - Replace $2,433 $0 $0 $0 $0
503 Metal Fence/Gate - Replace $0 $0 $0 $0 $0
505 Wood Fence - Repair/Replace $0 $0 $0 $0 $0
509 Decorative Arbor - Replace $0 $0 $0 $0 $0
514 Wood Retaining Wall - Replace/Repair $0 $0 $0 $22,581 $0 750 Pedestrian Gates - Replace $0 $0 $0 $0 $0
Mechanical & Systems
704 Intercom - Replace $23,725 $0 $0 $0 $0
803 Water Heaters - Replace $0 $34,164 $0 $0 $0
1001 Fire Backflow Preventer - Replace $0 $0 $0 $0 $0
1811 Plumbing - Inspect/Repair $8,517 $0 $0 $0 $0
1819 Fire Alarm System - Replace $0 $0 $0 $0 $0
1844 Electrical System - Inspect/Repair $0 $0 $0 $0 $0
Total Expenses $248,897 $57,572 $24,345 $54,469 $29,979 Ending Reserve Balance $51,582 $103,302 $195,069 $263,974 $365,006 Association Reserves, #58592-0 25 of 58 1/27/2026
ATTACHMENT 4
Fiscal Year 2037 2038 2039 2040 2041
Starting Reserve Balance $365,006 $437,963 $550,399 $667,263 $346,381 Annual Reserve Funding $127,845 $131,041 $134,317 $137,675 $141,117 Recommended Special Assessments $0 $0 $0 $0 $0
Interest Earnings $8,023 $9,875 $12,166 $10,128 $8,048
Total Income $500,873 $578,879 $696,882 $815,066 $495,546 # Component
Building Exteriors
104 Balcony Surfaces - Resurface $0 $0 $0 $2,131 $0
117 Walkway Decks - Resurface $0 $0 $0 $17,983 $0
117 Walkway Decks - Seal/Repair $0 $0 $0 $2,997 $0
118 Balcony Railing - Replace $0 $0 $0 $15,985 $0
324 Exterior Lights - Replace $0 $0 $0 $0 $0
508 Exterior Railing - Repair/Replace $0 $0 $0 $19,981 $0 703 Utility Doors - Replace $0 $0 $0 $0 $0
1115 Building Exterior - Repaint $0 $0 $0 $0 $0
1117 Exterior Surfaces - Repair $0 $0 $0 $0 $0
1137 Windows - Replace $0 $0 $0 $314,699 $0
1303 Comp Shingle Roofs - Replace $0 $0 $0 $0 $0
1308 Flat Roof - Replace $0 $0 $0 $0 $0
1309 Metal Roof - Replace $0 $0 $0 $20,813 $0
1312 Gutters/Downspouts - Partial Replace $25,164 $0 $0 $0 $0 Building Interiors, Common
325 Interior Lights - Replace $0 $0 $0 $0 $0
909 Bathroom - Refurbish $0 $0 $0 $0 $0
911 Kitchen Appliances - Replace $0 $0 $0 $0 $0
912 Kitchen - Remodel $0 $0 $0 $0 $0
918 Office - Remodel $0 $0 $0 $0 $0
1110 Community Room - Repaint $0 $0 $0 $0 $0
Building Interiors, Units
915 Unit - Remodel $27,385 $28,480 $29,619 $30,804 $32,036 Common Area
202 Asphalt - Repave $0 $0 $0 $0 $0
203 Asphalt - Seal/Repair/Stripe $0 $0 $0 $0 $4,438
320 Pole Lights - Replace $0 $0 $0 $0 $0
322 Bollard Lights - Replace $0 $0 $0 $0 $0
403 Mailboxes - Replace $0 $0 $0 $0 $0
404 Outdoor Furniture - Replace $0 $0 $0 $0 $0
503 Metal Fence/Gate - Replace $0 $0 $0 $15,818 $0
505 Wood Fence - Repair/Replace $0 $0 $0 $0 $0
509 Decorative Arbor - Replace $0 $0 $0 $0 $0
514 Wood Retaining Wall - Replace/Repair $0 $0 $0 $0 $0 750 Pedestrian Gates - Replace $0 $0 $0 $27,474 $0
Mechanical & Systems
704 Intercom - Replace $0 $0 $0 $0 $0
803 Water Heaters - Replace $0 $0 $0 $0 $0
1001 Fire Backflow Preventer - Replace $0 $0 $0 $0 $0
1811 Plumbing - Inspect/Repair $10,362 $0 $0 $0 $0
1819 Fire Alarm System - Replace $0 $0 $0 $0 $0
1844 Electrical System - Inspect/Repair $0 $0 $0 $0 $0
Total Expenses $62,910 $28,480 $29,619 $468,685 $36,474 Ending Reserve Balance $437,963 $550,399 $667,263 $346,381 $459,071 Association Reserves, #58592-0 26 of 58 1/27/2026
ATTACHMENT 4
Fiscal Year 2042 2043 2044 2045 2046
Starting Reserve Balance $459,071 $281,043 $401,473 $488,310 $558,717 Annual Reserve Funding $144,645 $148,261 $151,967 $155,767 $159,661 Recommended Special Assessments $0 $0 $0 $0 $0
Interest Earnings $7,395 $6,819 $8,890 $10,461 $12,441
Total Income $611,111 $436,123 $562,331 $654,538 $730,819 # Component
Building Exteriors
104 Balcony Surfaces - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Seal/Repair $0 $0 $0 $3,646 $0
118 Balcony Railing - Replace $0 $0 $0 $0 $0
324 Exterior Lights - Replace $15,128 $0 $0 $0 $0
508 Exterior Railing - Repair/Replace $0 $0 $0 $0 $0
703 Utility Doors - Replace $0 $0 $0 $0 $0
1115 Building Exterior - Repaint $143,175 $0 $0 $0 $0
1117 Exterior Surfaces - Repair $35,794 $0 $0 $0 $0
1137 Windows - Replace $0 $0 $0 $0 $0
1303 Comp Shingle Roofs - Replace $0 $0 $0 $0 $0
1308 Flat Roof - Replace $0 $0 $0 $0 $0
1309 Metal Roof - Replace $0 $0 $0 $0 $0
1312 Gutters/Downspouts - Partial Replace $30,616 $0 $0 $0 $0 Building Interiors, Common
325 Interior Lights - Replace $0 $0 $0 $0 $0
909 Bathroom - Refurbish $0 $0 $0 $0 $0
911 Kitchen Appliances - Replace $4,322 $0 $0 $0 $0
912 Kitchen - Remodel $0 $0 $0 $0 $0
918 Office - Remodel $0 $0 $0 $0 $0
1110 Community Room - Repaint $17,289 $0 $0 $0 $0
Building Interiors, Units
915 Unit - Remodel $33,317 $34,650 $36,036 $37,478 $38,977 Common Area
202 Asphalt - Repave $0 $0 $0 $0 $0
203 Asphalt - Seal/Repair/Stripe $0 $0 $0 $0 $5,400
320 Pole Lights - Replace $21,611 $0 $0 $0 $0
322 Bollard Lights - Replace $0 $0 $0 $0 $0
403 Mailboxes - Replace $0 $0 $0 $0 $0
404 Outdoor Furniture - Replace $3,602 $0 $0 $0 $0
503 Metal Fence/Gate - Replace $0 $0 $0 $0 $0
505 Wood Fence - Repair/Replace $0 $0 $0 $0 $0
509 Decorative Arbor - Replace $0 $0 $0 $0 $0
514 Wood Retaining Wall - Replace/Repair $0 $0 $0 $0 $0 750 Pedestrian Gates - Replace $0 $0 $0 $0 $0
Mechanical & Systems
704 Intercom - Replace $0 $0 $37,984 $0 $0
803 Water Heaters - Replace $0 $0 $0 $54,697 $0
1001 Fire Backflow Preventer - Replace $0 $0 $0 $0 $0
1811 Plumbing - Inspect/Repair $12,607 $0 $0 $0 $0
1819 Fire Alarm System - Replace $0 $0 $0 $0 $0
1844 Electrical System - Inspect/Repair $12,607 $0 $0 $0 $0 Total Expenses $330,068 $34,650 $74,020 $95,821 $44,377 Ending Reserve Balance $281,043 $401,473 $488,310 $558,717 $686,442 Association Reserves, #58592-0 27 of 58 1/27/2026
ATTACHMENT 4
Fiscal Year 2047 2048 2049 2050 2051
Starting Reserve Balance $686,442 $744,980 $886,871 $1,034,158 $1,082,924 Annual Reserve Funding $163,652 $167,744 $171,937 $176,236 $180,642 Recommended Special Assessments $0 $0 $0 $0 $0
Interest Earnings $14,302 $16,304 $19,194 $21,152 $23,136 Total Income $864,396 $929,028 $1,078,002 $1,231,547 $1,286,702 # Component
Building Exteriors
104 Balcony Surfaces - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Seal/Repair $0 $0 $0 $4,436 $0
118 Balcony Railing - Replace $0 $0 $0 $0 $0
324 Exterior Lights - Replace $0 $0 $0 $0 $0
508 Exterior Railing - Repair/Replace $0 $0 $0 $0 $0
703 Utility Doors - Replace $0 $0 $0 $0 $0
1115 Building Exterior - Repaint $0 $0 $0 $0 $0
1117 Exterior Surfaces - Repair $0 $0 $0 $0 $0
1137 Windows - Replace $0 $0 $0 $0 $0
1303 Comp Shingle Roofs - Replace $0 $0 $0 $0 $0
1308 Flat Roof - Replace $0 $0 $0 $98,589 $0
1309 Metal Roof - Replace $0 $0 $0 $0 $0
1312 Gutters/Downspouts - Partial Replace $37,249 $0 $0 $0 $0 Building Interiors, Common
325 Interior Lights - Replace $0 $0 $0 $0 $0
909 Bathroom - Refurbish $0 $0 $0 $0 $0
911 Kitchen Appliances - Replace $0 $0 $0 $0 $0
912 Kitchen - Remodel $0 $0 $0 $0 $0
918 Office - Remodel $0 $0 $0 $0 $0
1110 Community Room - Repaint $0 $0 $0 $0 $0
Building Interiors, Units
915 Unit - Remodel $40,536 $42,157 $43,843 $45,597 $47,421 Common Area
202 Asphalt - Repave $0 $0 $0 $0 $0
203 Asphalt - Seal/Repair/Stripe $0 $0 $0 $0 $6,570
320 Pole Lights - Replace $0 $0 $0 $0 $0
322 Bollard Lights - Replace $0 $0 $0 $0 $0
403 Mailboxes - Replace $0 $0 $0 $0 $0
404 Outdoor Furniture - Replace $0 $0 $0 $0 $0
503 Metal Fence/Gate - Replace $0 $0 $0 $0 $0
505 Wood Fence - Repair/Replace $0 $0 $0 $0 $0
509 Decorative Arbor - Replace $0 $0 $0 $0 $0
514 Wood Retaining Wall - Replace/Repair $0 $0 $0 $0 $0 750 Pedestrian Gates - Replace $0 $0 $0 $0 $0
Mechanical & Systems
704 Intercom - Replace $0 $0 $0 $0 $0
803 Water Heaters - Replace $0 $0 $0 $0 $0
1001 Fire Backflow Preventer - Replace $0 $0 $0 $0 $0
1811 Plumbing - Inspect/Repair $15,338 $0 $0 $0 $0
1819 Fire Alarm System - Replace $26,293 $0 $0 $0 $0
1844 Electrical System - Inspect/Repair $0 $0 $0 $0 $0
Total Expenses $119,416 $42,157 $43,843 $148,622 $53,991 Ending Reserve Balance $744,980 $886,871 $1,034,158 $1,082,924 $1,232,711 Association Reserves, #58592-0 28 of 58 1/27/2026
ATTACHMENT 4
Fiscal Year 2052 2053 2054 2055 2056
Starting Reserve Balance $1,232,711 $899,137 $993,609 $1,156,278 $1,310,449 Annual Reserve Funding $185,158 $189,787 $194,531 $199,395 $204,379 Recommended Special Assessments $0 $0 $0 $0 $0
Interest Earnings $21,300 $18,911 $21,480 $24,646 $27,237 Total Income $1,439,169 $1,107,835 $1,209,620 $1,380,319 $1,542,065 # Component
Building Exteriors
104 Balcony Surfaces - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Resurface $0 $0 $0 $0 $0
117 Walkway Decks - Seal/Repair $0 $0 $0 $5,398 $0
118 Balcony Railing - Replace $0 $0 $0 $0 $0
324 Exterior Lights - Replace $0 $0 $0 $0 $0
508 Exterior Railing - Repair/Replace $0 $0 $0 $0 $0
703 Utility Doors - Replace $0 $0 $0 $0 $0
1115 Building Exterior - Repaint $211,934 $0 $0 $0 $0
1117 Exterior Surfaces - Repair $52,983 $0 $0 $0 $0
1137 Windows - Replace $0 $0 $0 $0 $0
1303 Comp Shingle Roofs - Replace $0 $0 $0 $0 $0
1308 Flat Roof - Replace $0 $0 $0 $0 $0
1309 Metal Roof - Replace $0 $0 $0 $0 $0
1312 Gutters/Downspouts - Partial Replace $45,319 $0 $0 $0 $0 Building Interiors, Common
325 Interior Lights - Replace $0 $0 $0 $0 $0
909 Bathroom - Refurbish $13,329 $0 $0 $0 $0
911 Kitchen Appliances - Replace $6,398 $0 $0 $0 $0
912 Kitchen - Remodel $27,991 $0 $0 $0 $0
918 Office - Remodel $9,330 $0 $0 $0 $0
1110 Community Room - Repaint $25,592 $0 $0 $0 $0
Building Interiors, Units
915 Unit - Remodel $49,318 $51,291 $53,342 $55,476 $57,695 Common Area
202 Asphalt - Repave $54,650 $0 $0 $0 $0
203 Asphalt - Seal/Repair/Stripe $0 $0 $0 $0 $7,993
320 Pole Lights - Replace $0 $0 $0 $0 $0
322 Bollard Lights - Replace $19,194 $0 $0 $0 $0
403 Mailboxes - Replace $0 $11,644 $0 $0 $0
404 Outdoor Furniture - Replace $5,332 $0 $0 $0 $0
503 Metal Fence/Gate - Replace $0 $0 $0 $0 $0
505 Wood Fence - Repair/Replace $0 $51,291 $0 $0 $0
509 Decorative Arbor - Replace $0 $0 $0 $8,996 $0
514 Wood Retaining Wall - Replace/Repair $0 $0 $0 $0 $0 750 Pedestrian Gates - Replace $0 $0 $0 $0 $0
Mechanical & Systems
704 Intercom - Replace $0 $0 $0 $0 $60,814
803 Water Heaters - Replace $0 $0 $0 $0 $0
1001 Fire Backflow Preventer - Replace $0 $0 $0 $0 $0
1811 Plumbing - Inspect/Repair $18,661 $0 $0 $0 $0
1819 Fire Alarm System - Replace $0 $0 $0 $0 $0
1844 Electrical System - Inspect/Repair $0 $0 $0 $0 $0
Total Expenses $540,032 $114,226 $53,342 $69,870 $126,502 Ending Reserve Balance $899,137 $993,609 $1,156,278 $1,310,449 $1,415,563 Association Reserves, #58592-0 29 of 58 1/27/2026
ATTACHMENT 4
Accuracy, Limitations, and Disclosures
Association Reserves and its employees have no ownership, management, or other business relationships with the client beyond this Reserve Study engagement. Derek Eckert, R.S., company president, is a credentialed Reserve Specialist (#114). All work performed by Association Reserves adheres to National Reserve Study Standards (NRSS) under his Responsible Charge. To our knowledge, no material issues have been withheld that would distort the client’s situation.

This Reserve Study relies on information provided by representatives of the client, vendors, and suppliers regarding financial details, component quantities, maintenance plans, contracts, and historical conditions.

This information is deemed reliable but is not audited or independently verified. Our work is for budgeting purposes only and is not intended to be used for the purpose of any type of audit, quality inspections, forensic analysis, background checks of historical records, or the identification of construction defects, hazardous materials, or dangerous conditions.

Estimates for interest and inflation have been included because including such estimates is more accurate than ignoring them completely. Clients who engage us for update reports are considered to have deemed prior component quantities and other prior Reserve Study data accurate unless otherwise noted. During inspections, our company standard is to establish measurements within a 5% margin of error, and our scope includes visual inspection of accessible areas and components and does not include any destructive or other testing. Our opinions on Useful Life, Remaining Useful Life, and cost estimates are not guarantees of actual costs or timing and assume proper installation, maintenance, and a stable economic environment.

We recommend developing a preventive maintenance plan in conjunction with the Reserve Study to minimize costs and maximize life cycles. We can only adjust the Reserve Study as needed if the client provides such plans. Structural inspections are recommended to identify costs for reserve planning, and we recommend consulting subject matter experts for such evaluations. Corrective maintenance costs and timing can only be incorporated per the results of these engagements if the information is provided by the client.

No preventive maintenance plan or structural inspection report has been discussed or provided unless otherwise noted.

Identifying hidden issues, such as but not limited to, plumbing, electrical, and structural problems, is outside our scope of work. We recommend engaging subject matter experts to evaluate all issues outside the scope of the Reserve Study and our expertise.

Components included in this study usually have an anticipated remaining useful life within 30 years from the time of field observations. Information provided by the client about ongoing maintenance or repairs is included in component notes for full or site-visit reserve studies.

Because the physical and financial status of the property, legislation, the economy, weather, owner expectations, and usage are all in a continual state of change over which we have no control, we do not expect that the events projected in this document will all occur exactly planned. This Reserve Study is a “oneyear” document that needs to be updated annually to incorporate more accurate estimates. A long-term perspective improves the accuracy of near-term planning that this report projects expenses for the future.

We fully expect a number of adjustments will be necessary through the interim years to the cost and timing of expense projections and the funding necessary to prepare for those estimated expenses.

In this engagement, our compensation is not contingent upon our conclusions, and our liability in any matter involving this Reserve Study is limited to our fee for services rendered.

The re-use of this Reserve Study, figures, or calculations in any other format absolves Association Reserves of all responsibility.

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ATTACHMENT 4
BTU British Thermal Unit (a standard unit of energy)
DIA Diameter
GSF Gross Square Feet (area). Equivalent to Square Feet GSY Gross Square Yards (area). Equivalent to Square Yards HP Horsepower
LF Linear Feet (length)
UOM Unit of Measure
Effective Age The difference between Useful Life and Remaining Useful Life.

Note that this is not necessarily equivalent to the chronological age of the component.

Fully Funded Balance (FFB) The value of the deterioration of the Reserve Components.

This is the fraction of life "used up" of each component multiplied by its estimated Current Replacement. While
calculated for each component, it is summed together for a property total.

Inflation Cost factors are adjusted for inflation at the rate defined in the Executive Summary and compounded annually. These
increasing costs can be seen as you follow the recurring cycles of a component on the "30-yr Income/Expense Detail" table.

Interest Interest earnings on Reserve Funds are calculated using the average balance for the year (taking into account income and expenses through the year) and compounded monthly using the rate defined in the Executive Summary. Annual interest earning assumption appears in the Executive Summary.

Percent Funded The ratio, at a particular point in time (the first day of the Fiscal Year), of the actual (or projected) Reserve Balance to the Fully Funded Balance, expressed as a percentage.

Remaining Useful Life (RUL) The estimated time, in years, that a common area component can be expected to continue to serve its intended function.

Useful Life (UL) The estimated time, in years, that a common area component can be expected to serve its intended function.

Terms and Definitions
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ATTACHMENT 4

Component Details
The primary purpose of the Component Details appendix is to provide the reader with the basis of our funding assumptions resulting from our physical analysis and subsequent research. The Component Details herein represent a wide range of components that were observed and measured against National Reserve Study Standards to determine if they meet the criteria for reserve funding. 1) Common area maintenance repair & replacement responsibility 2) The component must have a limited life
3) Life limit must be predictable
4) Above a minimum threshold cost (board’s discretion – typically ½ to 1% of annual operating expenses).

Some components are recommended for reserve funding, while others are not. The components that meet these criteria in our judgment are shown with corresponding maintenance, repair, or replacement cycles (UL = Useful Life of how often the project is expected to occur, RUL = Remaining Useful Life pr how many years from our reporting period) and representative market cost range termed “Best Cost” and “Worst Cost”.

There are many factors that can result in a wide variety of potential costs, we are attempting to represent a market to be a one-time expense. Where no pricing, the component is deemed inappropriate for Reserve Funding.

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ATTACHMENT 4
Comp #: 104 Balcony Surfaces - Resurface Approx Quantity: 32 GSF Useful Life:
40 years
Remaining Life:
13 years
Lower Estimate: $ 1,150 Higher Estimate: $ 1,410
Building Exteriors
Location:

Funded?: Yes.

History: Installed in ~2000
Comments: There are (4) 8'x4' Decks. Decking surfaces typically need to be recoated every few years to restore the "wear" layer and protect the waterproofing membrane. Conditions can vary in different areas based on sun and weather exposure, adequacy of drainage, level of foot traffic, etc. Re-coating will restore the deck's aesthetic appeal while bridging small surface cracks. Lack of proper coating can reduce the decking system's life expectancy. Before recoating, the deck should be repaired (cracks and gouges patched, etc.).

Comp #: 104 Balcony Surfaces - Seal/Repair Approx Quantity: 32 GSF Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Cost Source: ARSF Cost Database
Location:

Funded?: No. The project cost estimate is below a minimum threshold. No Reserve funding allocated.

History:

Comments: There are (4) 8'x4' Decks. Decking surfaces typically need to be recoated every few years to restore the "wear" layer and protect the waterproofing membrane. Conditions can vary in different areas based on sun and weather exposure, adequacy of drainage, level of foot traffic, etc. Re-coating will restore the deck's aesthetic appeal while bridging small surface cracks. Lack of proper coating can reduce the decking system's life expectancy. Before recoating, the deck should be repaired (cracks and gouges patched, etc.).

Cost Source:

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ATTACHMENT 4
Comp #: 117 Walkway Decks - Resurface Approx Quantity: 360 GSF Useful Life:
40 years
Remaining Life:
13 years
Lower Estimate: $ 9,720 Higher Estimate: $ 11,900
Comp #: 117 Walkway Decks - Seal/Repair Approx Quantity: 360 GSF Useful Life:
5 years
Remaining Life:
3 years
Lower Estimate: $ 1,620 Higher Estimate: $ 1,980
Location:

Funded?: Yes.

History: Installed in ~2000
Comments: The client should consult with a decking or waterproofing contractor when evaluating the scope of work to properly define any necessary structural repairs/restoration. The funding recommendations shown here should be updated based on any new analysis/information provided by more comprehensive evaluations.

Cost Source: ARSF Cost Database
Location:

Funded?: Yes.

History: Installed in ~2000
Comments: The client should consult with a decking or waterproofing contractor when evaluating the scope of work to properly define any necessary structural repairs/restoration. The funding recommendations shown here should be updated based on any new analysis/information provided by more comprehensive evaluations.

Cost Source: ARSF Cost Database
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ATTACHMENT 4
Comp #: 118 Balcony Railing - Replace Approx Quantity: 80 LF Useful Life:
40 years
Remaining Life:
13 years
Lower Estimate: $ 8,640 Higher Estimate: $ 10,600
Comp #: 119 Balcony Railing - Repaint Approx Quantity: 80 LF Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Location:

Funded?: Yes.

History: Installed in ~2000
Comments: Inspect regularly to ensure the stability of the railing. A durable and typically long-lived component with ordinary care and maintenance. However, we recommend setting aside funding for eventual replacement at the interval below. We recommend regular painting to maximize the useful life of the railing.

Cost Source: ARSF Cost Database
Location: Common area
Funded?: No. The project cost estimate is below a minimum threshold. No Reserve funding allocated.

History:

Comments:

Cost Source:

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ATTACHMENT 4
Comp #: 324 Exterior Lights - Replace Approx Quantity: 28 Fixtures Useful Life:
20 years
Remaining Life:
15 years
Lower Estimate: $ 7,560 Higher Estimate: $ 9,240
Comp #: 508 Exterior Railing - Repair/Replace Approx Quantity: 80 LF Useful Life:
40 years
Remaining Life:
13 years
Lower Estimate: $ 10,800 Higher Estimate: $ 13,200
Location:

Funded?: Yes.

History:

Comments: The wall lights were observed during daylight hours and assumed to be in functional operating condition. As routine maintenance, clean by wiping down with an appropriate cleaner, change bulbs, and repair as needed. For cost efficiency and consistent quality/appearance throughout the property, it is best to plan for replacement at the interval below.

Cost Source: ARSF Cost Database
Location:

Funded?: Yes.

History: Installed in ~2000
Comments: Inspect regularly to ensure the stability of the railing. A durable and typically long-lived component with ordinary care and maintenance. However, we recommend setting aside funding for eventual replacement at the interval indicated below.

Cost Source: ARSF Cost Database
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ATTACHMENT 4
Comp #: 701 Unit Doors - Replace Approx Quantity: 1 Doors Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Comp #: 703 Utility Doors - Replace Approx Quantity: 2 Doors Useful Life:
35 years
Remaining Life:
8 years
Lower Estimate: $ 2,700 Higher Estimate: $ 3,300
Location:

Funded?: No. The useful life of this component extends past the scope of this report. No Reserve funding allocated.

History:

Comments: We were not able to test the doors during the site inspection. However, they appear to be intact and have a satisfactory seal. Doors should be inspected and repaired as needed, as an Operating expense, to ensure good function. This component provides funding for replacement at the interval below.

Cost Source:

Location:

Funded?: Yes.

History: Installed in ~2000
Comments: The doors appear to be functional. No indications of advanced deterioration noted. Doors should be inspected and repaired as needed, as an Operating expense, to ensure good function. We recommend setting aside funding for replacement at the interval below.

Cost Source: ARSF Cost Database
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ATTACHMENT 4
Comp #: 1115 Building Exterior - Repaint Approx Quantity: 15,900 GSF Useful Life:
10 years
Remaining Life:
5 years
Lower Estimate: $ 71,600 Higher Estimate: $ 87,500
Comp #: 1117 Exterior Surfaces - Repair Approx Quantity: 15,900 GSF Useful Life:
10 years
Remaining Life:
5 years
Lower Estimate: $ 17,900 Higher Estimate: $ 21,900
Location: Building exterior surfaces
Funded?: Yes.

History:

Comments: Painting is recommended at the intervals below to preserve the exterior building surfaces and maintain appearance.

Cost Source: ARSF Cost Database
Location: Building exterior surfaces
Funded?: Yes.

History:

Comments: Funding is recommended for partial wood replacement due to the potential for termite damage, wood rot, and natural deterioration. Coordinate with painting for cost efficiency. We recommend an inspection by a licensed professional before painting to determine the scope of needed repairs. Adjust funding as future conditions dictate.

Cost Source: ARSF Cost Database
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ATTACHMENT 4
Comp #: 1137 Windows - Replace Approx Quantity: 126 Windows Useful Life:
40 years
Remaining Life:
13 years
Lower Estimate: $ 170,000 Higher Estimate: $ 208,000
Comp #: 1303 Comp Shingle Roofs - Replace Approx Quantity: 7,500 GSF Useful Life:
30 years
Remaining Life:
3 years
Lower Estimate: $ 101,000 Higher Estimate: $ 124,000
Location: Building exterior
Funded?: Yes.

History: Installed in ~2000
Comments: Inspect regularly and handle minor repairs as an operating expense. This component provides funding for replacement at the interval outlined below.

Cost Source: ARSF Cost Database
Location: Building roof
Funded?: Yes.

History: Installed in ~2000
Comments: We recommend regular inspections by a licensed professional to ensure the roof is fully functional and aging correctly. Avoid debris buildup to maximize the useful life of the surface.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 39 of 58 1/27/2026
ATTACHMENT 4
Comp #: 1308 Flat Roof - Replace Approx Quantity: 2,000 GSF Useful Life:
20 years
Remaining Life:
3 years
Lower Estimate: $ 36,000 Higher Estimate: $ 44,000
Comp #: 1309 Metal Roof - Replace Approx Quantity: 500 GSF Useful Life:
40 years
Remaining Life:
13 years
Lower Estimate: $ 11,300 Higher Estimate: $ 13,800
Location: Building roof
Funded?: Yes.

History: Repaired in 2025
Comments: Minor repairs in 2025. We recommend regular inspections by a licensed professional to ensure the roof is fully functional and aging correctly. Avoid debris buildup to maximize the useful life of the surface.

Cost Source: ARSF Cost Database
Location: Building roof
Funded?: Yes.

History: Installed in ~2000
Comments: We recommend regular inspections by a licensed professional to ensure the roof is fully functional and aging correctly. Avoid debris buildup to maximize the useful life of the surface.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 40 of 58 1/27/2026
ATTACHMENT 4
Comp #: 1312 Gutters/Downspouts - Partial Replace Approx Quantity: 850 LF x20% Useful Life:
5 years
Remaining Life:
0 years
Lower Estimate: $ 15,300 Higher Estimate: $ 18,700
Comp #: 1405 Building Signs - Replace Approx Quantity: 2 Misc. Signs Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Location: Perimeter of building
Funded?: Yes.

History: Installed in ~2000
Comments: Most fair, some in poor condition. Inspect regularly, keep gutters and downspouts free of debris to ensure water evacuates from rooftops as designed, and repair as needed from general operating funds. Planning for replacement at the same intervals as roof replacement, cost efficiency is best.

Cost Source: ARSF Cost Database
Location: Throughout building
Funded?: No. Replace as an Operating Expense. No funding provided.

History:

Comments: We recommend replacing all signs at one time to maintain a uniform appearance. This component provides an allowance for replacement at the interval outlined below.

Cost Source:

Association Reserves, #58592-0 41 of 58 1/27/2026
ATTACHMENT 4
Comp #: 325 Interior Lights - Replace Approx Quantity: 10 Fixtures Useful Life:
25 years
Remaining Life:
5 years
Lower Estimate: $ 2,700 Higher Estimate: $ 3,300
Comp #: 909 Bathroom - Refurbish Approx Quantity: 1 Bathroom Useful Life:
20 years
Remaining Life:
5 years
Lower Estimate: $ 4,500 Higher Estimate: $ 5,500
Building Interiors, Common
Location: Community room
Funded?: Yes.

History: Installed in ~2000
Comments: As routine maintenance, clean by wiping down with an appropriate cleaner, change bulbs, and repair as needed. For cost efficiency and consistent quality/appearance throughout the property, it is best to plan for replacement at the interval below.

The best practice is to coordinate replacement at the same time as other interior projects, such as painting, whenever possible, to minimize downtime and maintain consistent quality standards.

Cost Source: ARSF Cost Database
Location: Community room
Funded?: Yes.

History:

Comments: As routine maintenance, inspect regularly and perform any needed repairs promptly, utilizing general Operating funds. A typical remodeling project can include some or all of the following: replacement of plumbing fixtures, partitions, countertops, lighting, flooring, ventilation fans, accessories, décor, etc. The timing of the bathroom refurbishment highly depends on the client's desired aesthetics. This component provides an allowance for general refurbishment at the interval indicated below.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 42 of 58 1/27/2026
ATTACHMENT 4
Comp #: 911 Kitchen Appliances - Replace Approx Quantity: 2 Appliances Useful Life:
10 years
Remaining Life:
5 years
Lower Estimate: $ 2,160 Higher Estimate: $ 2,640
Comp #: 912 Kitchen - Remodel Approx Quantity: 1 Kitchen Useful Life:
20 years
Remaining Life:
5 years
Lower Estimate: $ 9,450 Higher Estimate: $ 11,600
Location: Community room
Funded?: Yes.

History:

Comments: Replacement should ideally be coordinated with kitchen refurbishing. The funding recommendation shown here is for replacing with comparable quality appliances.

Cost Source: ARSF Cost Database
Location: Community room kitchen
Funded?: Yes.

History: Installed in ~2000
Comments: Kitchen materials typically have an extended useful life. However, many properties choose to refurbish the kitchen for aesthetic updates periodically. This may include refurbishing or refinishing kitchen cabinets and countertops, replacing sinks, installing or replacing under-cabinet lighting, etc. The timing of the kitchen refurbishment is highly dependent on the level of aesthetics desired by the client. This component provides an allowance for general refurbishment at the interval indicated below.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 43 of 58 1/27/2026
ATTACHMENT 4
Comp #: 918 Office - Remodel Approx Quantity: 1 Office
Useful Life:
20 years
Remaining Life:
5 years
Lower Estimate: $ 3,150 Higher Estimate: $ 3,850
Comp #: 920 Office Equipment - Replace Approx Quantity: 1 Allowance Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Location: Community room office
Funded?: Yes.

History:

Comments: Inspect regularly and repair or replace any damaged pieces promptly to ensure safety. We recommend replacing all pieces together to maintain a consistent style. Costs may vary based on the quality of furniture selected for replacement.

Cost Source: ARSF Cost Database
Location: Community room office
Funded?: No. Replacement handled out of the Operating budget. No Reserve funding allocated.

History:

Comments: Inspect regularly and repair or replace any damaged pieces as needed. We recommend replacing all pieces together to maintain a consistent style. Costs may vary based on the quality selected for replacement.

Cost Source:

Association Reserves, #58592-0 44 of 58 1/27/2026
ATTACHMENT 4
Comp #: 925 Laundry Room - Remodel Approx Quantity: 1 Laundry Room Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Comp #: 1110 Community Room - Repaint Approx Quantity: 3,200 GSF Useful Life:
10 years
Remaining Life:
5 years
Lower Estimate: $ 8,640 Higher Estimate: $ 10,600
Location: Laundry room
Funded?: No. Handled out of the Operating budget. No Reserve funding allocated.

History:

Comments: Based on our experience with other associations, laundry rooms should be remodeled at the approximate interval below. Remodeling typically includes replacing flooring and finishes (wall coverings, etc.), painting, and installing/replacing lighting, countertops, etc. Costs can vary depending on the type and quality of replacement materials.

Cost Source:

Location: Community room
Funded?: Yes.

History:

Comments: We recommend regular painting at the intervals below to maintain an attractive, uniform appearance. If possible, painting should be coordinated with flooring replacement. Touch-up paint should be kept on-site for projects in between cycles.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 45 of 58 1/27/2026
ATTACHMENT 4
Comp #: 915 Unit - Remodel Approx Quantity: 1 Unit
Useful Life:
1 years
Remaining Life:
0 years
Lower Estimate: $ 16,700 Higher Estimate: $ 20,400
Building Interiors, Units
Location: Building interior surfaces
Funded?: Yes.

History:

Comments: Funding provided to remodel (1) of (14) Units per year. Includes funding to repaint, replace flooring, and replace appliances. Remodeling is prudent to maintain an attractive, desirable appearance for residents. Life estimates can vary greatly depending on the level of wear and the client's preferences. Similarly, costs can vary greatly depending on the types of materials selected for replacement. The funding recommendation is for remodeling to an appropriate standard for this property.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 46 of 58 1/27/2026
ATTACHMENT 4
Comp #: 103 Concrete - Repair Approx Quantity: 1 GSF
Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Comp #: 202 Asphalt - Repave Approx Quantity: 2,050 GSF Useful Life:
30 years
Remaining Life:
25 years
Lower Estimate: $ 18,500 Higher Estimate: $ 22,600
Common Area
Location:

Funded?: No. Repair handled out of the Operating budget. No Reserve funding allocated.

History:

Comments: Large-scale repairs or complete replacement should not be anticipated, but moderate-sized projects should be considered as the concrete ages. Although timing, cost, and scope are difficult to predict, we suggest setting aside a repair/replacement allowance to supplement the operating budget in future years. Adjust as conditions dictate in future years.

Avoid adjacent overwatering of the landscape and monitor any tree roots nearby.

Cost Source:

Location:

Funded?: Yes.

History:

Comments: We recommend having the surface sealed and repaired; regular cycles of seal coating are recommended for maximum design life. As routine maintenance, keep the roadway clean, debris-free, and well-drained; fill/seal cracks to prevent water from penetrating the sub-base and accelerating damage. Even with ordinary care and maintenance, plan for eventual resurfacing at roughly the time frame below. As the timing draws nearer, consult an asphalt vendor/consultant for recommendations and a complete scope.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 47 of 58 1/27/2026
ATTACHMENT 4
Comp #: 203 Asphalt - Seal/Repair/Stripe Approx Quantity: 2,050 GSF Useful Life:
5 years
Remaining Life:
4 years
Lower Estimate: $ 2,310 Higher Estimate: $ 2,820
Comp #: 320 Pole Lights - Replace Approx Quantity: 4 Pole Lights Useful Life:
30 years
Remaining Life:
15 years
Lower Estimate: $ 10,800 Higher Estimate: $ 13,200
Location:

Funded?: Yes.

History: Resealed in 2025
Comments: Regular cycles of seal coating, along with any needed repairs, have proven to be the most cost-effective program for the long-term care of asphalt. Seal coating protects against damaging weather elements while bridging small surface cracks and maintaining a uniform appearance over the inevitable patching and repairs needed in future years.

Cost Source: ARSF Cost Database
Location:

Funded?: Yes.

History:

Comments: The pole lights were observed during daylight hours and assumed to be in functional operating condition. Inspect, repair, and change the bulbs as routine maintenance as needed. For cost efficiency and consistent quality/appearance throughout the property, it is best to plan for replacement at the interval below.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 48 of 58 1/27/2026
ATTACHMENT 4
Comp #: 322 Bollard Lights - Replace Approx Quantity: 6 Bollards Useful Life:
20 years
Remaining Life:
5 years
Lower Estimate: $ 6,480 Higher Estimate: $ 7,920
Comp #: 403 Mailboxes - Replace Approx Quantity: 14 Boxes Useful Life:
25 years
Remaining Life:
1 years
Lower Estimate: $ 3,780 Higher Estimate: $ 4,620
Location:

Funded?: Yes.

History:

Comments: The bollard lights were observed during daylight hours and assumed to be in functional operating condition. Inspect, repair, and change the bulbs as routine maintenance as needed. For cost efficiency and consistent quality/appearance throughout the property, it is best to plan for replacement at the interval below.

Cost Source: ARSF Cost Database
Location:

Funded?: Yes.

History: Installed in 2000
Comments: No signs of significant damage or abuse noted. As routine maintenance, inspect regularly, clean by wiping down for appearance, change lock cylinders, lubricate hinges, and handle repairs as an operating expense as needed. We recommend setting aside funding for replacement at the interval outlined below.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 49 of 58 1/27/2026
ATTACHMENT 4
Comp #: 404 Outdoor Furniture - Replace Approx Quantity: 4 Pieces Useful Life:
10 years
Remaining Life:
5 years
Lower Estimate: $ 1,800 Higher Estimate: $ 2,200
Comp #: 503 Metal Fence/Gate - Replace Approx Quantity: 95 LF Useful Life:
40 years
Remaining Life:
13 years
Lower Estimate: $ 8,550 Higher Estimate: $ 10,500
Location:

Funded?: Yes.

History:

Comments: Inspect regularly and repair or replace any damaged pieces promptly to ensure safety. We recommend replacing all pieces together to maintain a consistent style. Costs may vary based on the quality of furniture selected for replacement. This component provides an allowance for replacement at the interval below.

Cost Source: ARSF Cost Database
Location:

Funded?: Yes.

History: Installed in ~2000
Comments: Inspect regularly to ensure the stability of fencing. A durable and typically long-lived component with ordinary care and maintenance. However, we recommend setting aside funding for eventual replacement at the interval below. We recommend regular painting to maximize the useful life of the metal.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 50 of 58 1/27/2026
ATTACHMENT 4
Comp #: 505 Wood Fence - Repair/Replace Approx Quantity: 185 LF Useful Life:
25 years
Remaining Life:
1 years
Lower Estimate: $ 16,700 Higher Estimate: $ 20,400
Comp #: 509 Decorative Arbor - Replace Approx Quantity: 1 Structure Useful Life:
25 years
Remaining Life:
3 years
Lower Estimate: $ 2,700 Higher Estimate: $ 3,300
Location:

Funded?: Yes.

History: Installed in ~2000
Comments: As routine maintenance, inspect regularly for any damage, repair as needed, and avoid contact with irrigation and surrounding vegetation wherever possible. Plan to replace at roughly the time frame below, with funding included here for a similar wood fence replacement. Regular cycles of uniform and professional sealing/painting will help to maintain appearance and maximize life.

Cost Source: ARSF Cost Database
Location:

Funded?: Yes.

History: Installed in ~2000
Comments: With ordinary care and maintenance, plan for replacement at roughly the interval indicated below due to deterioration resulting from constant exposure to the elements. Local repairs between large-scale replacements can be handled as an operating expense.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 51 of 58 1/27/2026
ATTACHMENT 4
Comp #: 514 Wood Retaining Wall - Replace/Repair Approx Quantity: 110 LF Useful Life:
35 years
Remaining Life:
8 years
Lower Estimate: $ 14,900 Higher Estimate: $ 18,200
Comp #: 750 Pedestrian Gates - Replace Approx Quantity: 3 Gates Useful Life:
40 years
Remaining Life:
13 years
Lower Estimate: $ 14,900 Higher Estimate: $ 18,200
Location:

Funded?: Yes.

History: Installed in ~2000
Comments: Conditions vary by location. This component provides funding for repair/replacement. Adjust funding as future conditions dictate.

Cost Source: ARSF Cost Database
Location:

Funded?: Yes.

History: Installed in ~2000
Comments: A sturdy item that can typically last for an extended period with ordinary care and maintenance. In our experience, however, eventual replacement is warranted due to constant wear, usage, and exposure. Plan to replace at roughly the time frame below. Inspect regularly, clean for appearance, and repair promptly to ensure safety. We recommend regular painting to maximize the useful life of the gate.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 52 of 58 1/27/2026
ATTACHMENT 4
Comp #: 1006 Irrigation System - Repair/Replace Approx Quantity: 1 Irrigation System Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Comp #: 1008 Trees - Trim/Remove Approx Quantity: 1 Allowance Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Location: Common area landscaping
Funded?: No. Handle replenishment out of the Operating budget. No Reserve funding allocated.

History:

Comments: If properly installed and bedded without defect, the lines are expected to be long-lived, with no predictable replacement expectation. In our experience, however, renovations, repairs, zone reconfiguration, etc., become necessary as the system ages. This component provides a rotating funding allowance to supplement the operating/maintenance budget for periodic, more significant repairs and replacements. Adjust as conditions and actual expense patterns dictate in future reserve study updates.

Cost Source:

Location: Common area landscaping
Funded?: No. Handle replenishment out of the Operating budget. No Reserve funding allocated.

History:

Comments: This component may be utilized for larger tree removal/trimming projects that are not handled as operating expenses. If the community has not already done so, consult with a qualified arborist to develop a long-term plan for caring for and managing the trees within the community, balancing aesthetics with protecting property assets.

Cost Source:

Association Reserves, #58592-0 53 of 58 1/27/2026
ATTACHMENT 4
Comp #: 1009 Landscaping - Replenish Approx Quantity: 1 Allowance Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Comp #: 1113 Metal Surfaces - Repaint Approx Quantity: 1 GSF Useful Life:

Remaining Life:

Lower Estimate: Higher Estimate:

Location: Common area landscaping
Funded?: No. Handle replenishment out of the Operating budget. No Reserve funding allocated.

History:

Comments: Although typically funded as an ongoing maintenance item, this component may be used to set aside funds for more significant expenses, such as large-scale plantings, resodding lawn areas, and replenishing bark/mulch. Adjust as conditions and actual expense patterns dictate in future Reserve Study updates.

Cost Source:

Location:

Funded?: No. The project cost estimate is below a minimum threshold. No Reserve funding allocated.

History:

Comments: Plan to repaint at the interval below to inhibit corrosion, prevent or limit costly repairs, and maximize design life.

Cost Source:

Association Reserves, #58592-0 54 of 58 1/27/2026
ATTACHMENT 4
Comp #: 704 Intercom - Replace Approx Quantity: 3 Intercom Useful Life:
12 years
Remaining Life:
5 years
Lower Estimate: $ 17,600 Higher Estimate: $ 21,500
Comp #: 803 Water Heaters - Replace Approx Quantity: 3 Water Heaters Useful Life:
12 years
Remaining Life:
6 years
Lower Estimate: $ 24,300 Higher Estimate: $ 29,700
Mechanical & Systems
Location:

Funded?: Yes.

History:

Comments: Clean and wipe down regularly with an appropriate cleaner. Handle any minor repairs as an operating expense. We recommend regular service and maintenance by a licensed professional to help ensure the intercom system continues to function correctly. We anticipate the need for replacement at the interval below.

Cost Source: ARSF Cost Database
Location:

Funded?: Yes.

History: Replaced in ~2021
Comments: (6) Rheem 100 gallon, 199.9k BTU water heaters, all installed in ~2021; M/N: GNU100-200, S/N: A092120814, Mfg.

Date: 3/2021. It is best to plan for replacement within the typical life expectancy of ten to fifteen years. We recommend regular inspections by a licensed professional to ensure the water heater is fully functional and aging correctly. Flush the tank and inspect the pressure relief valve each year. If not already done, install earthquake strapping and a drain pan for added protection.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 55 of 58 1/27/2026
ATTACHMENT 4
Comp #: 1001 Fire Backflow Preventer - Replace Approx Quantity: 1 Device Useful Life:
30 years
Remaining Life:
3 years
Lower Estimate: $ 13,500 Higher Estimate: $ 16,500
Location: Common area
Funded?: Yes.

History: Installed in ~2000
Comments: No active leaks or other indications of failure. We recommend regular testing and inspection by a licensed backflow professional to ensure the device is fully functional and aging correctly.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 56 of 58 1/27/2026
ATTACHMENT 4
Comp #: 1811 Plumbing - Inspect/Repair Approx Quantity: 1 Allowance Useful Life:
5 years
Remaining Life:
0 years
Lower Estimate: $ 6,300 Higher Estimate: $ 7,700
Location: Throughout property
Funded?: Yes.

History:

Comments: Analysis of the plumbing systems is beyond the scope of our services. As the property continues to age, we highly recommend that the client engage a qualified firm to evaluate the plumbing systems, which are classified as a major component under Civil Code Section 5550, as amended by SB900. This may include forensic wall openings and testing sections of piping.

Manufacturing defects occasionally become apparent, and specific site conditions (e.g., galvanic corrosion, dissimilar metals in contact with piping, chemical reactions) can contribute to the premature deterioration of plumbing systems. Patterns of significant repair expenses, leaks, poor flow, and sediments in the lines will accelerate the need for replacement.

The client should seek a detailed analysis to identify hidden conditions, project the remaining useful life of the system, and make recommendations for any necessary repairs, maintenance, and other necessary actions. Before such an evaluation, there is no predictable basis for large-scale plumbing repair or replacement expenses.

The cost projected below is a budget allowance for an inspection and minor repairs, including SB900-related expenses. Adjust the funding and frequency of this component based on further analysis by a subject matter expert and as future conditions dictate.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 57 of 58 1/27/2026
ATTACHMENT 4
Comp #: 1819 Fire Alarm System - Replace Approx Quantity: 1 System Useful Life:
20 years
Remaining Life:
0 years
Lower Estimate: $ 10,800 Higher Estimate: $ 13,200
Comp #: 1844 Electrical System - Inspect/Repair Approx Quantity: 1 Allowance Useful Life:
15 years
Remaining Life:
0 years
Lower Estimate: $ 6,300 Higher Estimate: $ 7,700
Location: Main panel is located in the lobby
Funded?: Yes.

History:

Comments: Fire panels and systems may last an extended period, barring unforeseen electrical incidents. However, design obsolescence, parts availability, technological advances, and code changes dictate the need to plan for periodic replacement. A wide range of panels and features is available, and this component provides an allowance for replacement. We recommend regular testing and inspection by a licensed professional to ensure all fire systems are fully functional and aging correctly.

Cost Source: ARSF Cost Database
Location: Throughout property
Funded?: Yes.

History:

Comments: Assessing the electrical system is beyond the scope of our services. As the property continues to age, we highly recommend that the client engage a qualified firm to evaluate the electrical system, which is classified as a major component under Civil Code Section 5550, as amended by SB900.

The client should seek a detailed analysis to identify hidden conditions, project the remaining useful life of the system, and make recommendations for any necessary repairs, maintenance, and other necessary actions. Before such an evaluation, there is no predictable basis for large-scale electrical system repair or replacement expenses.

The cost projected below is a budget allowance for an inspection and minor repairs, including SB900-related expenses. Adjust the funding and frequency of this component based on further analysis by a subject matter expert and as future conditions dictate.

Cost Source: ARSF Cost Database
Association Reserves, #58592-0 58 of 58 1/27/2026
ATTACHMENT 4
February 27, 2026
Via Email
Brisbane Housing Authority
50 Park Place
Brisbane, CA 94005
Attn: Ms. Julia Ayres
Re: Redevelopment Agency of the City of Brisbane Loans for Visitacion Garden - Conditional Letter to RFP
Dear Ms. Ayres:

As we explained with our correspondence on June 19, 2025, we are supportive of the City’s and Authority’s efforts to reposition the Project with a new long-term lessee or operator. With a prospective new lessee working towards City Council approval on April, 2026, we want to reiterate our support of the transfer of the property to the new lessee and any agreement to alter the terms of the lease are conditioned upon the City's agreement that, regardless of the outcome of the RFP, the Authority and City will:
(a) forgive existing Project loans and interest that consist of (i) a loan made by the Redevelopment Agency of the City of Brisbane (Agency) to BRDIGE Housing Corporation (BRIDGE) in the original principal amount of One Million Dollars ($1,000,000) from the Agency's Low and Moderate Income Housing Fund (Agency Loan), and (ii) a loan made by the Agency to BRIDGE in the original principal amount of One Million Five Hundred Thousand Dollars ($1,500,000) from the proceeds of bonds issued by the Agency deposited in the Agency's Low and Moderate Income Housing Fund (Bond Proceeds Loan); (b) release BRIDGE, and cause any new lessee or operator to release Brisbane Senior Housing, Inc., as current lessee, from ongoing liabilities associated with the Project; (c) work with us to seek to cause the County of San Mateo’s (County) Project loan to be forgiven concurrently with the Authority’s loan; (d) terminate the lease as soon as practicable in light of the RFP responses.

Docusign Envelope ID: 75F74118-E22F-489A-8C08-977736DA54CB We look forward to our collective efforts relating to this Project. Please let us know of next steps and we look forward to a successful Council meeting.

Sincerely,
Sierra Atilano, Chief Real Estate Officer
Authorized Representative of Brisbane Senior Housing, Inc.

Enclosure
[Signatures of City and Authority on the Following Page] Docusign Envelope ID: 75F74118-E22F-489A-8C08-977736DA54CB The City of Brisbane and Brisbane Housing Authority hereby agree to forgive the Agency Loan and the Bond Proceeds Loan effective as of the expiration or earlier termination of that certain Ground Lease dated as of January 26, 1998, amended in November 4, 1998, and April 10, 2000, and to comply with the other conditions described in (b) through (d).

CITY OF BRISBANE,
a municipal corporation
By: ___________________________
Name: ___________________________
Title: ___________________________

BRISBANE HOUSING AUTHORITY,
a public body, corporate and politic
By: ___________________________
Name: ___________________________
Title: ___________________________
Docusign Envelope ID: 75F74118-E22F-489A-8C08-977736DA54CB